40149430 Inside the Minds Leading Consultants (1) | Strategic Management | Competence (Human Resources)

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Inside The Minds:

Leading Consultants

Industry Leaders Share Their Knowledge on the Art of Consulting

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Inside the Minds: Leading Consultants Industry Leaders Share Their Knowledge on the Art of Consulting CONTENTS Frank Roney 11 THE DRIVE FOR BUSINESS RESULTS: WALKING IN THE CUSTOMER’S SHOES Randolph C. Chuck Lucier 97 OVERLAP YOUR CIRCLES: MAXIMIZING THE THREE ELEMENTS OF THE STRATEGY CONSULTING BUSINESS Dietmar Ostermann 131 THE ART OF CONSULTING-FIGURING OUT HOW TO DO IT RIGHT . Blazer UNDERSTANDING THE CLIENT Pamela McNamara WORKING AT THE INTERFACE OF TECHNOLOGY AND BUSINESS 29 59 Dr.

Luther J. Smith 189 GIVING CLIENTS MORE THAN THEY EXPECT Thomas J. Silveri 209 TAILORING SOLUTIONS TO MEET CLIENT NEEDS David Frigstad THE FUTURE OF MARKETING CONSULTING John C. McAuliffe THE RULES HAVE CHANGED 229 253 . Nussbaum THE DISCIPLINE OF CLIENT VALUE 149 Bradley M.

Leading Consultants THE DRIVE FOR BUSINESS RESULTS: WALKING IN THE CUSTOMER’S SHOES FRANK RONEY IBM General Manager. Worldwide Business Innovation Services 11 .

IBM’s consultants live at the intersection of business strategy and technology execution. It was driven by ERP systems and by the opportunity to reengineer businesses. It’s an intoxicating profession. and it’s constantly changing in both areas. 12 . At the core. With the initial emergence of the Internet and the first wave of e-business. But it’s also about hard work and staying on the leading edge of change while being practical about what can and cannot be done. That increased throughout the 1990s. we saw an insatiable demand for leading consulting talent – talent that could develop strategies. to take out costs and become more productive and efficient. In the early 1990s. or a boring engagement.Inside The Minds The Consulting Path I’ve been in professional services for 24 years. and ultimately for their customers. Today. Our customers’ business designs are evolving as new applications of technologies emerge. creating value has everything to do with the transformation to e-business. we saw a real acceleration of consulting around technology. the consulting industry is all about creating value for our customers. There’s never a boring day. particularly around the Y2K technology changeover. as technology became a key enabler for business strategy. a boring assignment.

In order to know that we’re delivering that value. in the last two years. You have to execute. or all of the above. Then. Defining Success We are maniacally focused on customer value. we measure customer satisfaction regularly and then ask ourselves. save money. It’s an important element of our mission. As we now know. The second wave of ebusiness is all about the hard work of both business innovation and technology integration.Leading Consultants create new business models. and implement technologies that drive a company’s growth. we saw a surge around some very big ideas propelled by the business designs of the dotcoms. The best consultants know how to deliver on the promise of big ideas. The dot-coms learned the hard lesson that ideas and innovation without tangible business results isn’t going to cut it. increase their competitive advantage. You have to marry innovation with maximizing shareholder value. “Have we helped our customers drive their shareholder value? Have we impacted their revenue growth or increased their market share? Have we impacted their competitiveness? Have we helped to reduce their costs and increase their productivity? Have we contributed to the development of their business strategy or the transformation of their business?” 13 . it was short lived.

and marry that with the right technology to address a customer’s business issue – not technology for technology’s sake.Inside The Minds If you’re going to live at the intersection of business strategy and technology execution. It’s not about piece-parts. The winning combination is a consultant who can keep the industry at the forefront of his or her mind. the simple question that must be asked every day is “Have we made a difference to our customers?” If we haven’t leveraged technology to further their business strategy and to drive more shareholder value. we haven’t done our job. Consultants must be industryfocused these days. we must also drive value for our own shareholders. is the ability to unlock and leverage business strategies across an entire enterprise and all of its business processes. at least for the businesses that we advise. as we do. business designs. too. 14 . and technologies that are evolving industry wide. It’s about unlocking the promise of e-business throughout a company. new business processes. We have another job. though. As a publicly owned company and as a publicly owned consultancy. but technology that has real payoff for customers. in all of its business processes. Another measure of success. Driving value for both our customers and our shareholders is an interesting balance – one that we’ve been successful at for quite a while now. They must be keenly focused on the insights.

What’s next are e15 . It’s a key technology for increasing customer loyalty.Leading Consultants Opportunities An important opportunity is wireless and mobile computing. Additionally. For businesses. customer relationship management. One fascinating potential is that of location-based services that will allow service transportation companies to track the locations of delivery vehicles and make route adjustments based on real-time market demands. and increase the effectiveness of the sales force. Finally. we think the next big push in e-business is going to be around transforming the workplace. Going forward. We use wireless technology everyday. wireless makes it easier to do things like track inventory. and e-procurement. Wireless makes businesses mobile. Completely new business models will emerge that take advantage of wireless technologies. these location-based services can provide information to emergency services at a local level to immediately locate people in distress who may call in from a cellular phone. It allows people to take aspects of their job with them when they’re traveling or working directly with their customers. IBM led the world down the path of using the Web to transform core business processes like supply chain. reducing operational costs. improve customer responsiveness. it’s going to have the kind of game-changing effect on companies that Web access did a decade ago. and improving business productivity.

and then reassemble them using our insight and our knowledge to help them develop their business strategy. Because of the demand for time-to-market. Our job is to both listen to the customer and to be very thoughtful. because we’ve done it ourselves within IBM. I think of every customer’s enterprise as a puzzle. Phase Two will be about putting all these piece-parts under one e-Workplace umbrella as an integrated capability to reduce the costs of traditional workplaces and increase the efficiencies of workers. assess the parts. The Art of Consulting I think the art of consulting starts with the ability to understand our customers in the context of their business in their industry. However.Inside The Minds Workplaces. The art is really about both good listening and having a point of view on what to do and how to do it. and it can be a big cost saver. We need to decompose what we hear. This first phase has been about efficiency – turning technology. instant messaging. such as enterprise portals. e-meetings. into employee self-service hubs characterized by tools like eHR. 16 . We know. and corporate yellow pages. It’s doable in the short term. consulting must be about both ideas and execution. online learning. consultants who can get customers into the market with fresh ideas and workable strategies faster than the competition will lead in the marketplace.

Objectivity is crucial. The ideal customer/consultant relationship is when the change agent becomes the trusted business advisor. This requires having the customer’s best interests in mind at all times. Wireless is a great example. We think that’s about right. Sometimes that means saying no to the customer. In this sense. and they know a number of different directions they could take. They understand wireless. and ways to leverage technology. but they come to us to help them think through the right alternatives that will drive business results. They know the hot topics. our customers are saying they want not only the ideas but also the execution. Sometimes that means changing the direction of critical customer projects. or implementing technologies. where ideas are challenged and accountability is held paramount.Leading Consultants The Need for Consultants Consultants work with clients for many different reasons. Most of our customers are looking for innovation. customers come to a consultant because they are looking for both insight and capability – whether it’s for business strategy. Consultants operate best when they are held accountable for delivering on their ideas. Often our best customer relationships have a healthy dose of creative tension. but they’re looking for specific industry thought leadership and a point of view. managing change. 17 . Increasingly. fresh insight into their business strategies.

I don’t think this balance issue is ever going to go away. and intellectual assets. or solution capability. and improve individual productivity and effectiveness by better managing what we “know. A high premium is put on collaboration and on the sharing and reuse of assets. the consulting profession is well known for stretching work-life balance parameters. To address this need. emerging technologies are putting a lot of demands on consultants today. Our consultants compete not just on the basis of their industry. Unlike ten years ago. However. we not only go to market by industry. in many ways. when you could more easily master the technology that we had at that time. but we’ve established technology centers of competence. that’s what makes this profession so appealing. share. We use knowledge management to 18 . It is increasingly important to innovate. expertise. organize.” Our ability to save. Operating at the leading edge of business and technology change is challenging. technology. but also through their ability to leverage their experience.Inside The Minds Difficult Aspects of Consulting From a people perspective. The breadth of business change in the business world and the new. and apply the extensive knowledge within IBM is key to providing distinctive value to our customers. the current environment requires both adept industry expertise and a much deeper technology competence than ever before.

Roadmaps Most good consultancies have an underlying methodology. This knowledge sharing and reuse leads to outstanding service that distinguishes IBM Global Services from its competitors. and solutions. It’s an important part of being a world-class consultancy today. which are points of view of where the industry is going. Over the past ten years we have created what we term the “IBM Global Services Method.” which is a whole series of structures and methodologies for conducting our consulting business. from strategy engagements to technical implementations. technical frameworks. best practices. We cultivate.Leading Consultants provide our professionals with a framework that enables the reuse of insights. This is also the basis of how we train our people and how we can execute on an end-to-end value proposition. Our preferred strategy is to work with leading independent software vendors and to use their 19 . leveraging the combination of thought leadership and business best practices. and maintain industry roadmaps. We also believe value-nets are an important aspect of how we create customer value. but it’s not enough. Industry roadmaps are very important. develop. You have to have a deep understanding of industry. We also maintain rich technical frameworks in an effort to shorten time-to-market.

We also work hard in the start-up phase of each engagement to understand our customer’s technology preferences and their infrastructure.Inside The Minds applications as a key enabler for our customers’ business needs. As we go through the project. We expect our consultants to come to the engagement with that kind of orientation. at their competitors. we use these insights as grounding points for our work. and at their industry and seeing the environment that they are operating in. 20 . Our business partnerships and our value-nets are at the center of creating value for our customers. This broad perspective ensures we can recommend what is best for the customer’s enterprise instead of using only standard industry approaches. Getting up to Speed The most important thing is to see the industry and the marketplace through the eyes of the customer. It’s about looking through the customer’s lens at their markets. Doing all of this gives us the ability to truly walk in the customer’s shoes.

That means being very open to what’s working and what’s not. It is imperative that we understand our customer’s perception of the value of our services and their satisfaction with the business impact of our services. 21 . whether it’s on track or not. A consultant’s value must be expressed in customer terms with relevant proof points around industry expertise to have credibility in the marketplace. There are many ways to assess the relationship or engagement. I think every consultant needs to talk with their customer everyday. but there’s nothing better than listening to the customer. Consultants must clearly understand and anticipate customer expectations to proactively innovate new solutions to meet their needs.Leading Consultants Metrics to Measure Engagements A consultant will succeed only if customers value their services and are extremely satisfied with the results of their work. and repeat business. excellent reference accounts. They must have an active dialogue and actively listen. Strong client relationships and the delivery of quantifiable business value will lead to consistently satisfied and loyal customers. In addition. and learning the culture and style of our customers. We must support all recommendations with facts.

It’s important for the customer to have a sense of trust. Listen to the customer to identify issues that may go beyond the question asked. for whatever reason. Sometimes we may disagree with the client on direction. and vice versa. Worry about how recommendations will be implemented. and provide the answers that bring real business value. or it may take more time to develop the right answer. What’s not okay is refraining from putting honest thoughts on the table or. 22 . failing to work through the necessary logic of an engagement. Another thing I look for in our consultants is the willingness to say no when it’s in the best interest of the client. and talk about the realities – that’s what the customer wants. Provide a roadmap to success. Lay things on the line. separate logic from emotion. That’s okay. paying attention to the culture of the customer’s enterprise and its impact on the execution of recommendations. Recommend ways to resolve potential issues within the customer’s environment. There are times when we may not know the right answer. Straight talk is essential.Inside The Minds Good Qualities in Consultants I think the hallmark of a good consultant is becoming a trusted business advisor for the customer. use meaningful words. to be comfortable with the consultant.

There are a number of enablers for this kind of collaboration and communication. and you have to have the technology at hand to communicate globally. Teaming and collaboration skills are extremely important today. 23 . The formulation and execution of a customer engagement is not only based on the customer’s needs. with whatever resources they have.Leading Consultants I also think that with the complexities in today’s world. Consultants need to be able to reach out to their network of colleagues at a moment’s notice. in the time frame they want. We talked about the importance of getting up to speed. We use Lotus Notes extensively. you have to be a team player. Pitfalls to Avoid One of the biggest pitfalls is promising more than you can deliver. but also based on understanding the customer’s capabilities and resources to support the engagement. At the same time. The idea of doing what the customer wants. consultants also need a healthy degree of objectivity. may not always be the right plan. They need to be self-starters who are maniacally focused on delivering customer value. A good consultant thinks about how he or she can add value that goes beyond just following a good work plan. It may be over-promising.

Consultants must stay current. That we had a certain point of view a year ago doesn’t mean that point of view won’t change as we increase our learning and adjust our insights to keep pace with market dynamics. They need to keep that foremost in their minds. and how the project is serving the customer.Inside The Minds Another pitfall is recommending last year’s idea or best practice. I also ask our consultants to serve the customer and not just the project. in terms of core competencies. Leadership We’ve developed a number of competency profiles for our key leaders. their needs. Many types of leaders are required to be successful in a large global consultancy. We have work plans. but at the end of the day. First and foremost. While we use structures and methods as a core part of how we consult. our leaders have to have customer insight. and we have deadlines. we have objectives. it all comes back to creating customer business value. we also must be highly flexible and innovative. It is important to remember that there is a really creative part to this business. They have to be able to think about business through the customer’s eyes. Every day they have to think about the customer. They must keep the customer’s interest foremost in their minds. The market is continuing to evolve at a very fast pace. They also have to 24 .

In terms of differentiation. Our consultants need to be decisive. Still others are business incubators. If you wake up every day thinking about putting your customer first. It’s at the pinnacle of what we do at IBM. and in technology.Leading Consultants have the drive and passion to be successful in this business. This profession is exciting because it’s at the pinnacle of change and because it’s at the intersection of business strategy and technology execution. but they 25 . in industry. The ability to lead and provide compelling points of view at that intersection is crucial. Golden Rules of Consulting The first golden rule is that the customer comes first. Others have strong subject matter expertise in business strategy. All must be change agents and must strive to be recognized as such by their clients. They have to be able to deliver straight talk. They have to be team players with both the customer and with colleagues across IBM because dynamic teaming is an important part of how we deliver customer value. everything else will fall into place. The second thing I would stress is accountability – the willingness to be held accountable and deliver on our commitments. We want to put innovative and fresh ideas on the table for our customers. in business process. some consultants are visionaries.

Inside The Minds have to be ideas that are executable. The future is bright for those who can deliver end-to-end value. These are different times in our industry. We can exceed customer expectations only if we deliver real business value. It’s not easy to be global. It’s not something you can go out and acquire and quickly assemble. Today’s projects are far more complex than they’ve ever been. Speed – from strategy design to execution – is key. It takes a strong culture to maintain objectivity and a critical eye for continually improving our execution in the market to make this work. but I think these three rules are important tenets. or to have insight in each industry and the segments that make up those industries. There are a lot of clichés in this industry. The third golden rule is that everything we do should be about driving customer business results. and for that reason customers are looking for globally oriented change agents who can deliver at the intersection of business strategy and technology execution. The Future of Consulting The consulting industry is going through massive change. What we’ve done here at IBM Global Services is to build the world’s leading consultancy and services company from the ground up. Ideas will always be 26 .

and industry specific solutions. Mr. I think only a handful of companies are going to be able to deliver the kind of value that global customers need. His responsibilities include achieving the growth. managing the BIS global investment portfolio. who are responsible for developing industry services strategies. developing the BIS strategy and value propositions. IBM Global Services. and profit targets for BIS globally. Roney leads the five Global BIS Sector Executives. provide our point of view. We listen.Leading Consultants important. Those who can implement their ideas will win. Today we have over 150. market share. every day. but those who can crack the code to bridge strategy and technology are going to be the leaders of this industry going forward. developing thought leadership. We went from being a very small player to a world leader through a lot of hard work and clear determination. We’re ten years into our journey of building IBM Global Services and IBM’s consulting capability. We let them do most of the talking. that BIS has the right resources and capabilities to deliver the offerings. Frank Roney is general manager. on a global basis. and validating. We got to where we are by maintaining a strong commitment to putting the customer first. Business Innovation Services. 27 . Worldwide.000 professionals. and then execute.

Mr. He was responsible for the strategy. Roney was IBM's senior executive responsible for the worldwide systems integration business. Mr. Before that. and operations of the United States consulting and systems integration business units of IBM Global Services. where he managed their Michigan business unit. Mr. IBM Global Services. Roney was a partner with Price Waterhouse in their Management Consulting Services division. 28 . This responsibility included establishing the business models and business processes IBM uses worldwide to perform the systems integration business and leading IBM's global systems integration community to ensure consistent business performance.S. Integration Services. Roney was general manager. including the automotive.Inside The Minds Previously. and consumer product segments. and major engagements in a variety of industries.. SAP business unit. Prior to joining IBM in 1993. retail/distribution. U. profitability. growth.

BLAZER KPMG Consulting.Leading Consultants UNDERSTANDING THE CLIENT RANDOLPH C. Chairman and Chief Executive Officer 29 . Inc.

Being integrally involved in solving these concerns is exciting and dynamic. We provide not just analytics. increase your knowledge. we are a group of topnotch professionals. and be truly driven toward success.Inside The Minds The Enjoyable Aspects of Consulting Although I’m charged with a variety of business responsibilities as CEO. everyone you encounter is experienced. intelligent. and eager to learn. to support their business on an ongoing basis. both inside and outside the business. as well as information systems. Second only to working for our clients is the excitement of working with our colleagues. at the end of the day. committed. Most challenges that companies face today revolve around harnessing the information they have and using it to their advantage. Throughout all levels of the organization. It creates an environment that encourages you to work hard. but also experience and industry knowledge. At KPMG Consulting. We’ve created a culture that emphasizes personal responsibility for 30 . Clients primarily come to KPMG Consulting for two reasons: to solve a business problem or pursue a business opportunity. and it keeps me always thinking forward about the next major business and technology innovations to help our clients tackle them. what I most enjoy and what gets my creative juices flowing is still providing direct assistance to our clients and helping our professionals solve client challenges.

You have to be experienced first so that you have a solid foundation. So. It’s a wonderful position to be in. developed. you typically have very diverse teams. and our clients. The Art of Consulting The art of consulting starts with a clear understanding of what the need is – the business problem or challenge the client is facing. and trained to work with the client and that they are performing well and in the clients’ best interests. where you can help others grow within a company – a client’s or ours – and see them be successful. those we report to who may not have all the specifics of the client’s particular needs. it’s a great pleasure and a huge responsibility to bring others into the company and help ensure their success. That’s what drives the creativity. You have to make sure that they’re mentored. The need for mentoring can go in all directions. particularly once you begin to accept more responsibility and move to the management levels that help drive the business.Leading Consultants our individual growth. who often serve key roles on our joint teams. those who work alongside us. while at the same time focusing on each other’s success and valuing teamwork and collaboration. and you also have to know a wide range of client specifics before you can even know 31 . And our mentoring opportunities are enormous. We are mentors to those who report to us. motivated.

Sometimes it involves an approach that has never been tried before. which is addressing client needs and delivering results through creative solutions and methodologies. and the competitive marketplace they operate in. How do you develop an approach or methodology to deliver the results that the client is looking for. Once you’ve locked onto the need and the aspects of that requirement.Inside The Minds where and how to start. Unless you have constant dialogue going on 32 . or providing a service. generating information. the environment they sit in. you reach the second phase of this art. As you go through a project. and whether they’re producing goods. You have to understand the client. the need will change and become more defined. You have to understand what their competitors are doing. the state of their machinery or apparatus. You have to understand their culture. you must truly understand the client and the client’s situation. I see it as one part relationship building and one part technical analytics of the client’s current situation and needs. Your intended solution may begin to drive on one aspect of that need but forget the other aspects. while providing enough specialty expertise to guide both you and the client? The third aspect of this art is the communication process that evolves when you try to keep both the client’s needs and the project methodology in lock-step as the project unfolds. In the art of consulting.

We incorporate a change process and approval structure into all of our involved engagements. as well. This helps manage changes to the scope of projects and lets the client and our professionals fully understand the implications of changes across project areas and to cost and resource demands. as well as project timelines. 33 .Leading Consultants between those two things. The bottom line: We have to make sure that expectations are set. onsite corrections are made. Most of our projects kick off with a formal planning stage. and that we keep going until we get to the result the client wants. you’re going to get out of synch. It’s a real art. And most important: It has to be a lasting result. In turn. it helps us mobilize additional personnel as needed and helps keep the project moving. that KPMG Consulting and client team members at all levels have a clear understanding of their responsibilities and who specifically is accountable. need and delivery. instead of stalling out. It also ensures that background information will be provided to get us up to speed quickly and that formal communication plans are in place. detailed and ongoing feedback is provided. communications are clear. which helps make sure roles are clearly defined.

It serves no purpose for consultants to extend the length of client engagements and rack up fees unnecessarily. So our professionals really have to hit the ground running with the industry acumen and speed with purpose that give clients confidence that their time isn’t being wasted. We have a faster pace and probably a greater desire for results than we’ve ever had in the business world. clients and consultants often share a misconception that technology is the great panacea for business problems.Inside The Minds The New Face of Consulting – Challenges The job of and pressures on a consultant have gotten even harder in recent years. Technology is an enabler for you to be an effective consultant and solve problems. I say that primarily because the world is running at a faster speed. people expect immediate solutions to complex issues and are often impatient with the exploratory work that must be done to offer real solutions to complicated business needs. But technology both helps and confuses the issue. to 34 . Ninety-six percent of our top clients are repeat customers because we deliver results – fast. Whether it’s getting information instantaneously via e-mail or restructuring their entire business model in six weeks. In addition to the increased sense of urgency. We’ve had good success with automated diagnostic and assessment tools and have derived immeasurable benefit from the knowledge-sharing that our intranet permits.

People are still pretty good. and making sure those goals are understood. The notion of how you deal with workforce issues just seems more complicated today. and we’re all trying to be fairminded. Technology can’t do that. so you get a win-win. But technology also confuses things because people race for technology to solve fundamental business issues. This requires experienced people. they’re going to respond the same way people did 30 years ago. I feel pretty good about where we stand and what we’ve done to respond to our people. But this is not a theory I really subscribe to. We’re all rational people. It’s important to make sure those goals are in lock-step with the organization. We have ambitions and goals. thinking through the problems and alternatives. If you treat them openly and honestly. 35 . but I think we have to be clearly attentive to people’s needs. Another recent change that makes the profession seem a little harder is the whole theory around people – your workforce and what their professional desires and goals in life are and what their emotional attitudes are. when really it’s all about the same good people who have goals. they are dedicated to doing the right things for their clients and their colleagues. We talk a lot about the Generation X and the “Me Too” and the “What’s in it for me” types who are not willing to put in the hard work and hours required.Leading Consultants name a few quick examples.

it’s the same thing we did 30 years ago. understanding the business need. What a Consultant Can do for a Client The range of consultant involvement can be pretty broad. Their workforce is already involved in operations and core business roles. and they don’t have a special or contingent workforce that they can throw at new requirements or charge with seizing new opportunities. trying to find a solution to that need. but the fundamentals are still the same. People would say it’s the same thing they did 50 years ago. It’s still about locking onto a client. Has consulting become more difficult? The answer is yes. It’s not cost36 . communicating around that solution. We do it a little faster now. Sometimes the clients understand their needs and understand how they need to get them solved. It’s a solution for a need. but they don’t necessarily have the workforce to get it done.Inside The Minds If you put all that together. and that’s expected. It’s still about hiring a workforce and motivating a workforce that feels like they’re going to get something as a result of delivering something to the client. and we’re a little more sophisticated. and keeping it in lock-step. Our generation of consultants has pushed the bar up. It’s about facing challenges and delivering results. and the next generation will take it to the next step.

Leading Consultants effective for clients to add to their own workforce to get those things done. He or she knows where the risks are and where typical issues arise. The third thing we do is come at the issue from a more objective point of view. That’s not to say that the same solution works everywhere. If a consultant has been involved in multiple similar projects – for instance. I think we have a workforce that is very involved and can repeat some of the things we’ve done in other environments. Bringing experience A or experience B to the table – that’s the second thing we do. meaning we’re not caught up in the 37 . because every client is unique. Not every client will consider or accept a solution that worked somewhere else. That allows the analytics to say.” So the consultant can use those past successes to eliminate much of the groundwork. “This is what has worked there. But I think we have to have the ability to see what has worked and what hasn’t worked in other environments. that professional adds real value. it’s that we have the additional professionals to augment their workforce for specific projects. but this is how it needs to be tweaked here. and speed up the project to achieve the desired results. reduce the risks. because it does not. ERP implementations – that a typical customer might need only once. So it’s not always a situation where we can do something that our customers can’t.

we focus on the Global 2000 client marketplace. It’s clear that companies can gain a lot in terms of the way they service their customers. because of our objectivity from experience and augmentation.or cost-effective for them to do themselves. we can help the client punch through on something that would not be as time.Inside The Minds culture or some of the issues clients may face internally. As a business. the logistics of manufacturers and distributors. Within the supply chain. in our own business. responsibilities. There are very few Global 2000 companies today that do run their financials as one global 38 . or preferences. I would point to the whole globalization arena. We can foresee solutions more clearly than they can at certain points in time and may be able to punch toward those solutions when their own workforce may be mired in organizational issues. We can bridge those issues for them more easily. products and services – there’s still a lot of work to be gained there. The New Face of Consulting – Opportunities One could talk about areas of growth functionally and say the whole sales force automation world is an area ripe for improvement and a great opportunity for consultants. But I don’t think the impression should ever be that we can do something our clients can’t. For example. There’s a lot of work and a lot of growth in that area. I think.

but we could be webcast. on a broadband line. They have different regions and different product service divisions. they start to know what their financials are for a period that closed two or three weeks earlier. and so they can have virtual closes. face-to-face. The question is. What I think happens is that companies truly need to be global.Leading Consultants entity. I can tell you at the end of a particular period. and your financial status and your logistic or engineering status is all real-time or virtual-time. a richer interview? 39 . Technologies are being developed in our communication firms across the world. so they can be real-time. where the company stands on our financials. How do we utilize them in our businesses? We do interviews on the phone. supply chain vendors. so you can see where you are against your key indicators?” I think there are going to be tremendous opportunities to help clients make progress in that area. So by the 15th or 20th day of the next month. which all run their own sets of financials or their reports on customers. and resource management. You’re already two to three weeks away from making corrections if the numbers don’t come out the way you want them. within a very short time. Another area where there will be growth is broadband technologies. Would that make for a better interview. Traditionally companies close their books on the 30th of the month. “How do you get all that pushed so that activity happens.

40 . You have to stay focused on the client. The other half of the opportunity is staying focused on the client’s business needs.Inside The Minds The answer is probably yes. Someday the cost of doing that and the infrastructure that needs to exist to support it will be so commonplace that of course we’ll do it that way. they are all areas for growth. What drives their business? What are the things they worry about the most? What do they have to change and improve upon to become competitive? That drives the business need. and understand what the client’s needs are. We’re going to get involved in all those areas. You have to be involved in both of those things. is involved in both of those two aspects. I think it’s important for a consultant to be focused on two things: One is the state of technology – the traditional answer if you’re a consultant. and people will interact with that. Trends come and go. It is not a commodity business. But it’s only half of the challenge and the opportunity. One size does not fit all. KPMG Consulting. put yourself in the client’s shoes. as an integrator. consulting. and focusing on hot technologies or slick solutions won’t keep clients. It makes consulting. but there are some common threads that you can clearly do to make your services efficient. which can then pull technology to make it happen. and that goes back to the art of consulting.

Be patient and follow through in every element. the ultimate test of client satisfaction is. Stay locked on the issue at hand and punch through. but don’t lose focus and start doing 28 other things that could interfere. but also a fix that can support them in their opportunity area over a period of time.Leading Consultants Focus. It’s better to punch through on one thing than to try to dabble in 28 things. if we made any money. The Real Value of a Consultant . “Was the client fulfilled. Another measure of success is that the solutions have staying power. or helped them seize an opportunity. we’ll go back internally to look at the metrics to see if we did the job on time. Good results. and did we help them become more successful?” Of course. And be patient.Success Success for our clients means that they’ve achieved the ends they’ve set out to achieve. results that last a lifetime. focus. we’ve helped them to solve it. No matter what happens in terms of our internal execution and the delivery against those needs. if we got a challenge out of it. Understand every aspect of that need. if our people got an opportunity to propel 41 . It’s not just a one-time fix. Stick to the methodologies and don’t skip steps. don’t come overnight. If they’ve identified a need. focus.

to help us understand their needs better. and to trust us. a company like ours stands behind our work. “Was the customer satisfied? Did we help the client move forward as a business?” We look for ongoing partnerships with our clients. Their part of the relationship is to be open and honest with us about the performance and how it’s going and to work with us. the question becomes. so they can evaluate our performance. and keeping that need and delivery in cost and balance with each other. We still need to set some criteria. Instead of how much more did this cost us. but getting the engagement to the point where we build mutual trust and respect for each other is what truly drives success. so we are both successful. some milestones. If we do that. and we’ll keep doing it into the next hundred years. every time we get involved with a client.Inside The Minds themselves forward. We’ve done it for a hundred years. regardless of whether this cost us a little bit more money or not. delivering on that need. clients are going to 42 . One thing that drives us is. But the first test is. There’s a whole host of internal things we examine. “Did we get the result we wanted?” That’s ultimately the question we ask. etc. The relationship has to be one in which we are supporting each other in moving forward. “Did the client get something out of it that enabled them to move forward?” To support that. when that’s required. Our job as business advisors and integrators is to support our clients by understanding their need.

You have to start with a set of leaders who understand a specific industry vertical because they either came from that industry. then you define the solutions and the solution teams that are specific to that industry. based on the specific needs of that industry. one engagement. or one time in and one time out. you focus on building the expertise along vertical lines. They’ve been a part of it. First. you draw from a number of sources. That’s what we’re interested in. or have developed relationships in that vertical so they understand the industry. and you can’t use just a few. serviced it for a long time. you have to use all of them. From there. They must understand the particular work environment and industry needs to have credibility with their clients. We’re interested in clients for life. Once you have a strong. A Foundation of Expertise To offer expertise to your clients. the leaders build a consulting team by recruiting talent with similar backgrounds through their work experiences. And that’s what we want: We want long-term relationships. Consistently delivering success will ensure that we keep exactly those clients. not just one project. 43 .Leading Consultants invite us into more business problems and opportunities. experienced resource pool.

and the experiences we’ve gained across all of our industry verticals – so that the solutions have been benchmarked against other things. we call customer care or billing in certain industries. you start with leaders. even their names may have industry-specific meanings. But it’s more than a different nomenclature.Inside The Minds When defining solutions. Then you back them up with knowledge resources – for instance. so that they can offer innovation and insight. So. sample engagement deliverables. but also to enable them to keep up with the trends in their verticals. For instance. there’s a unique emphasis and a difference in the way in which we want to go about building the client relationship. white papers. Another essential part of this ability to provide insight is understanding what the hot points are and what the 44 . you build a workforce. what someone else may call customer relationship management. So to build a foundation of expertise. Then you follow that up with an established training program – not just to teach them skills and to teach how those skills apply in that vertical. It’s essential that we understand the solutions and tailor them so that we can deliver a solution to a client that is responsive to the way that vertical goes about its business. in that industry we use a different nomenclature. and you equip them with methodologies and solutions that are tailored for that marketplace. and your professionals have materials to reference.

As I’ve stated. but in different relationships we target different verticals. so everyone knows they’re in it together. functional accounting package – a financial system that handles the supply-chain management aspects – would fit very well in their business and in that marketplace. They are all part of building the true vertical business. Finally.Leading Consultants technologies are that may influence or affect the industry. that there is an expertise base. where a solid. accounts payable. and set up the rewards structure can 45 . and solutions that fit various verticals differently. For instance. and that you have a clear go-to-market approach. funds flow management. it’s important to know what the competitive pressures are and what the clients are going through. I think the way you set up your profit and loss. you should recognize that you don’t take every alliance partner into every vertical. But I think you also have to back up that understanding with strong alliance relationships. Be aware that there are functional and technical aspects of every alliance partner’s products. services. KPMG Consulting has alliance relationships with a veritable Who’s Who in the technology business. So when you’re building that vertical competence. But for a high-tech business where the needs are vastly different – accounting. it is important to manage the people by verticals. you would take a particular technology to a consumer manufacturing business. or plans for establishing an information systems architecture – a different package may be a better answer. manage the business.

there are several things you have to examine. and how do they take it to market?” Look at their workforce and ask. and so forth. “With their specific market focuses. alliance relationships. what is their solution set? How have they built that solution set.” But to understand the differences among consulting companies. Ask yourself.Inside The Minds all help reinforce this foundation of expertise and these coherent teams. You can’t just go hire people who have experience. “Are they a company that will be there for a long time? Will they support their implementations. “Are all these consulting companies the same?” The answer is clearly. “No. workforces. Start here. standing 46 . “What supports that solution in terms of its implementation and execution for the client?” Then look at the very mechanical things inside a company and see how well they stand behind their clients. “What is their market focus?” Not all system consultants are focused on the same marketplace. The next questions you ask are. Market focus will or should drive a whole different internal set of solutions. Are All Consulting Companies the Same? I’m often asked. you have to use that experience to its full advantage and continuously build upon it to enrich your client delivery and keep the business innovative and responsive.

I would say there are many different players in our space. You have the Big Five companies. across the board. and many of their consulting units are spinning off. the integration space. Some of them are hardware businesses. Most of these Big Five are strong in the applications arena. If. from hardware to outsourcing to consulting. instead. They’re wed to certain hardware and software platforms. some are software businesses. but they provide a whole array of client services. Then you have a group of firms that I call the 47 .Leading Consultants behind their work? Do they bring new ideas to the table? Do they create new technology that may impact and influence some of the things we’ve done and things we can do in the future?” I think you have to look at a whole range of things and see who the companies are. where their focus is. and how good they are at these components. They’re very focused on Webenabling applications and providing a front-end to the dotcom companies. In addition to e-consultants. and they’re very focused on their biggest area of opportunity and revenue – outsourcing. Their market focus has really been on dot-com concerns and companies that started in the last five to ten years. you want to know how to categorize the different companies. big IT services are predominantly outsource businesses. but some are stronger in systems. You have the econsultants in this space.

Managing in a Turbulent Market The changing economy poses two major challenges for consultants: managing our business and workforce during turbulent times and helping clients manage. pure integrators. the big IT services. We are not doing our client any good. and the real. We help clients by staying focused on the most important business needs and opportunities a client has and making sure we’re working with them up front. We deliver on the client’s desired value and results. Our job is to stay focused on the critical need and on things that really will work and bring the intended results. the kind of workforces they’ve built to support that solution set varies among those firms. In terms of their market focus and solutions. I think we have to recognize that all of our clients in all of our industries have different pressures and 48 .Inside The Minds New Breeds. I believe KPMG Consulting is one of only two pure integrators in the public domain. When the market is cautious and growth is not the same as it was four years ago. Under these criteria. I think we clearly have three major buckets or groups: the econsultants. There are differences even within the New Breeds. to try to peddle something else that may be out of that mainstream. unless they ask for it. clients want to dedicate only the resources and funds that get a real return on investment and help them in a critical need area.

and being creative but focused is one of the fundamentals of our business. as it is not the most exciting path. and make sure we are investing those resources.Leading Consultants different concerns. if you’re not sticking to the fundamentals. How do we manage our own business and workforce? I’m a strong believer in sticking to the fundamentals. Even if you’re keeping up with growth. We tend to overlook them when we’re in a boom economy and when everyone talks about growth. I 49 . if you’re taking advantage of the growth and trying to solidify and streamline your delivery instead of focusing on the client’s business problem. but for the needs of tomorrow. You can be creative and wild. Customers will call these fundamentals blocking and tackling. I believe. The fundamentals include: Focus on the client’s needs. in good times and in bad times. deliver against those needs. The fundamentals are fashionable in both good times and bad times. The client won’t have confidence in you. and we have to make sure our approach and solutions recognize these differences. you should stay focused on the fundamentals of business. make sure we are running our business efficiently with the available resources. you’re not going to be there when things turn down. I call it being a fundamentalist. make sure we communicate in response to those needs. as well. or our bread and butter. Develop the workforce not just for today’s needs. Our organization would probably prefer that I wasn’t.

put them in the most important opportunities. You must manage your resources effectively. Even in that area. and keep those resources in general synch with your business. which we have been very public about. just by keeping our bookings consistent. The e-consultants have for the most part gone away. When you invest personnel or funds. and make them count. We stuck with it. and we grew. and delivering on the promises we have made to clients.” You can still be profitable when the economy is down. deploy them where the highest opportunities are. Making a Profit When the Economy is Down Nowhere in the economics book does it say.Inside The Minds believe we need to stay very focused on the fundamentals – and foremost among them is commitment to our client’s success. and everyone really seems to want to abandon what I called the systems integration space. and the big IT services have flocked to outsourcing. 50 . we can still be profitable. has not been as robust as some of our other business units. focusing our investments. “If you don’t grow. The national service sector. That’s not to say that we are not having tougher times in some sectors. you can’t turn a profit. We didn’t abandon it. Our company has been growing at a time when no one else’s has.

Leading Consultants Further. to face the challenge. Develop them. Downturns in the economy present these opportunities. recruit. To the extent that you can do that. but also recognition and promotion opportunities and opportunities to fulfill one’s own personal goals and commitments. our total revenue may not be going up. 51 . and move them forward. you are going to be better off. I think you can get a winwin even in the tough times. Advice for Business and Leadership Take care of your people. for us to be challenged. some of whom are probably brighter than I am. These professionals are able to catapult the business forward. as well as others. nurture them. mentor. and to be rewarded for having done so – not just monetary rewards. but we may be able to gain presence with certain clients or marketplaces where we couldn’t before. if we are gaining market share by adding clients. You will help ensure your own and the future success of the business. and you will have those people to turn to. I feel very strongly that if you’ve taken advantage of the tough times. you’ll be better positioned when things improve. We can then leverage them later. and turn over much of the business to some very bright people. I would say a great deal of my personal success has come because I’ve been able to pick. because their success is your success.

Being fairminded is very important. and we may understand the environment they face. It drives your culture and your success. whether they’re government officials. We can discuss things with our client and. We owe it to clients to tell them up front when there are things we’re concerned about. are those individuals who understand the importance of people. we do prospective client evaluations to take a look at the new client and the scenario we are entering. even if it’s a competitive situation. We may know the client’s business problem. it’s organization-to-organization.Inside The Minds The best leaders anywhere. They are very fair in how they treat people and how they want their business to treat other businesses. In these evaluations we have an analytical tool that puts some of that risk on the table. But we haven’t yet worked across the table with them day-in and day-out. it’s a risk because we’re not familiar with that client. if they see things differently than we do. 52 . business leaders. over the long periods of a contract and reached the end of a contract. so we can really get a sense of whether or not we can meet the client’s expectations. In these cases. It’s not just personto-person. Taking Risks Every time we take on a new client. too. or sports people.

who will give it a second check and balance. It may be one candidate who has strong technical skills. but it is the prudent thing to do. and another has great communication skills. Once we’ve identified those risks. For every business decision we make. we may need a 53 . we need to balance or react to each risk that manifests itself. I think the way to protect against the risk is to establish some processes so that risk is one of the first things considered and certainly an element that is always considered. We do that in our decision-making processes. It may be the right outcome for both of us in the long term. It forces us to be to be very deliberate in our thinking. The prospective client evaluation has to be completed and signed by one of our risk-managing directors. Does it slow the decisionmaking process down by a day or three or six? It could.Leading Consultants make a conscious decision to perhaps just stop the relationship. If for this client. our team is strong enough technically. Even some projects with existing clients pose risks. we’re taking a risk. we need to think about the risks. We have to imbed certain processes that force risk to be considered in every decision – not just considering it. which is probably every day. but making sure we have a response game plan. I’ve explained that every time we sign a new client.

and make sure all the elements of the business talk to each other and keep moving. inside their positions. We have imbedded processes to facilitate that with checks and balances.Inside The Minds communications person to be the lead on this specific engagement. Keeping the Edge The only way to keep your edge is to be out in the marketplace. seeing what affects them. 54 . engagement reviews. Since risk is something that’s imbedded in every decision we make. and we have to make sure we’ve been up front about it. People inside KPMG Consulting would probably say I’m a very good administrator: I understand the business. either through dialogue. We need to see that the risk of getting out of synch in this situation is the communication. So I have to spend a certain amount of time and a lot of my thought in their framework. But being a good administrator doesn’t give me an edge. this is the enjoyable part. But as I said earlier. I’m going to lose my edge. understand the fundamentals. seeing the real pressures people face every day. or meetings with our people and our clients. we have to make it a conscious part of the decision process. If I’m not out there with our professionals or clients.

and they will still need information. helping them achieve results and success without boundaries. Clients will still have businesses and business priorities. I think consulting. I think technology will step up the pace. “I’m a consultant. or their vendor base is global.Leading Consultants The Future of Consulting The fundamentals of locking on a client’s business problem are not going to change in the next decade. Technology brings us closer to operating virtually and enables consulting professionals to work remotely with clients more than we ever could before. We’re focused on the Global 2000 companies.” and you were in business. but any company in the world is global. and the way virtual organizations are created won’t significantly change. 55 . Either their customer base is global. adding new wrinkles and new solutions. We need to operate globally ourselves and assist our clients as they face similar globalization needs. The validity and accuracy of the information are getting faster and faster. The perception was you put up a sign in your window that said. Most companies do some transactions outside their regional or national borders. which I think is going to be very dominant in years to come. All of this enables globalization. In the past it seemed easy to enter this profession. I don’t think that’s fair to the state of the profession.

Mr. The marketplace learned that a new technology plus a new consulting firm does not necessarily result in staying power for the firm.200 employees within six industry lines of business around the world. I believe that those consulting companies that are able to deliver real value on a sustained basis will be the ones that are still here five years from now.C. and hosting/outsourcing. D. Blazer is based in the headquarters office in Tysons Corner. Organizations put a lot on the line with the consultants they choose. In 1991. office. he was named partner-in-charge of KPMG’s Public Sector Consulting group. web architecture. In 1997. In 1977. Inc. VA. Blazer joined KPMG LLP as a consulting professional in the Washington. which include strategy.. KPMG Consulting provides Internet integration services. he was named a member of a two-person executive team that directed all KPMG Consulting services. technology enabling. Mr. The staying power comes from being a sophisticated business made up of experienced people who can provide lasting results. He manages over 10.Inside The Minds particularly for the global companies. is a very sophisticated business. Randolph C. integration. Blazer is chairman and CEO of KPMG Consulting. In February 2000. e-branding and design. Mr. Blazer helped 56 .

Blazer received his MBA from the University of Kentucky and his BA in economics from Western Maryland College. government contractors. LLC. Mr. and major federal system acquisition programs. process reengineering. 57 . Prior to joining KPMG.Leading Consultants incorporate the consulting group into KPMG Consulting. His client experience includes work with federal agencies and departments. Blazer served as a captain in the United States Army. performance management. and large-scale systems development support to major government and commercial clients. research universities. Blazer has more than 25 years of experience in strategic business planning. Mr. Mr.

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Little.Leading Consultants WORKING AT THE INTERFACE OF TECHNOLOGY AND BUSINESS PAMELA MCNAMARA Arthur D. Inc. Chief Executive Officer 59 .

financial. Little. rolled up our sleeves. but the goal of completing it in just eight to ten weeks was challenging. half from ADL and half from the client company. This was not an unusual assignment. The project was dubbed “Moonshot” because the prospects for success seemed to be well captured by the old expression about the impossibility of “shooting the moon. feeling more than a little daunted by the technical. to help re-launch the product to take advantage of its new indications as soon as possible. Inc. regulatory. which had originally been developed for the treatment of breast cancer. the company immediately realized the importance of getting the product to market as quickly as possible. We immediately assembled an interdisciplinary team of about 16 people.” All of us were driven by this extraordinary challenge. The firm contacted Arthur D. but it was also clear to us all that getting this product to market would save lives.Inside The Minds Rewards of Consulting In 1998. We worked together 60 . research at a major pharmaceutical company showed that one of its products. and jumped in.. could also be effective in the prevention of breast cancer. and marketing barriers before us. a process that typically takes up to 18 months. Since breast cancer is a major health concern. Not only was there the immediate practical business goal to urge us on.

not all of these elements show up to the same degree in all assignments. we developed plans. this project captures all that is best about the consulting profession. multifaceted challenge. that we called the LEM. one of the first drugs to be used in the prevention of any form of cancer. in most cases.Leading Consultants day and night. we took actions. to society and our economy. The central purpose of consulting. we had an exceptional team of client representatives. For me. is to make a difference. We brainstormed. The product. Of course. isolated in a hot. 61 . The problems and opportunities I’ve worked on have really made a difference to our clients and. a need to change or innovate. and we made a real difference – not only for the company. we conducted analyses. after the Lunar Excursion Module from the Apollo moonlanding program. after all. together with our own players. but also for society as a whole. made it to the market in just eight weeks. cramped building. And we succeeded. far from the company headquarters. It was an extraordinary. we argued and compromised. we learned a lot. and we drank lots of coffee. but they are always there in some combination. We are called in only when there is a challenge. not to run day-to-day operations.

there has been a confluence of those elements in consulting. There are few more personally rewarding experiences than working together with a group of others toward a common goal. and technology experience – is the cornerstone of future success and the essence of professional satisfaction. This delivers real results – financial and strategic value – to our clients. Not only is collaborating with team members in our firm. It has been particularly rewarding for me. as well as with client staff. we must listen and learn. because that is central to meeting the needs of the client. business. our ability to build on each experience – drawing upon our deep industry. to be able to blend my personal and business lives. but whoever said that two heads are better than one was right on the mark. focusing on what I care about most. One plus one plus one equals six in this business. therefore. The best career advice I ever received was to focus on what’s most important to me – what I hold dear and where I want to make a difference. 62 . Fortunately for me. I can’t overstate the importance of teamwork to job satisfaction.Inside The Minds In the process. personally satisfying. But just as importantly.

maintaining your integrity. Ultimately. there are many more men than women in consulting. and values and expectations can vary widely across nations and cultures. and follow through on implementing. You have to listen well. partially because of the different roles we have traditionally played in society as wives and mothers.Leading Consultants Challenges Facing Women in Consulting Of course. but to focus instead on developing the competence. the key has been not to dwell on the possibility of barriers and drawbacks. however. for example. For me. Consulting is inherently an international profession. To be successful in this business. you have to stick to the important basics of knowing your territory. delivering profits. and paying close attention to the people aspects of consulting. I think the consulting profession 63 . And to some extent. there can be different expectations for women. confidence. Even in countries where there are still barriers to full acceptance of women. challenging your clients to think about the tough issues. determine how to make sure the results are owned by your clients. particularly as women are becoming more and more successful worldwide. it doesn’t matter whether you’re a man or a woman. Those are skills I’ve learned from both men and women professionals. and professionalism required to do the job. there tends to be an understanding that women are playing leading roles in many societies.

approach. a large number of women professionals in the senior ranks. At ADL. as well as in providing inspiration as role models in the organization. I’ve been fortunate to have some fabulous mentors over time. and a number of them have been women.Inside The Minds is one in which the best players bring those characteristics to the table. my views are heavily colored by having spent virtually my entire career 64 . There is much to be learned from both men and women who have succeeded in this profession. history. organization. nor should they be. Differences Among Consulting Firms Each consulting firm has its own corporate culture or “personality” that arises from such key variables as its business focus. I must make it clear that not all of my mentors and role models have been women. and I can think of quite a few of them who made a difference in coaching me. relatively speaking. Good mentors can make a great deal of difference. When I joined the firm back in the early eighties. and I’ve worked with both men and women who exemplify those qualities. At the same time. In the interest of full disclosure. we had. and even its size. What matters most in this business is how to deliver excellent results and bring in new business.

and food technology. But at ADL. energy. Little. and the Internet. for example. many of which are quite large and may embrace a range of specialties. and most have developed rigorous methodologies that work well for them. software. ADL is something of an exception in that its chief business focus is at the intersection of business and the diverse range of technologies that drive innovation in our society. have people who have expertise in these particular arenas. I have done so because of the particular culture of this place. ADL was responsible for the development of such innovations as the first iso-octane. all the way to biotech. These firms. accounting and financial operations. Throughout the last century. Many companies have been very successful in focusing on specific functional domains. In today’s business press. computers. networks. This focus arises from the firm’s historic capabilities in research and development.Leading Consultants at Arthur D. which I have found to be both personally and professionally rewarding. we embrace technologies ranging from information technology and its underlying field of electronics. including such elements as telecommunications. such as supply-chain management. materials. or information technology. which was later adopted 65 . “technology” has been appropriated to refer specifically to information technology.

the company expanded its capabilities to embrace the broader strategic and day-to-day management implications of work in a broad range of technical fields. Current examples range from a low-fat ice cream that incorporates fish oil. Accordingly. and the development of environmental auditing. which led to Fiberglas™. to a novel medical device that can identify the previously undetectable areas in coronary arteries most likely to cause heart attacks. Japan. the first computerized inventory control package for IBM.Inside The Minds as the antiknock gasoline standard. as well as in partnership with others. An explosion of research and development in industry and universities increasingly formed the basis of new business opportunities throughout the 20th century. We continue to develop products in our own laboratories. It has also embraced the issues of venture capital and start-up management required to bring ideas and innovations to the market. 66 . the first fiber-optic interactive cable television system near Osaka. and a system that allows organizations to monitor and manage energy use and greenhouse gas emissions across all operations. the design of the NASDAQ stock exchange system now in London and Tokyo. which is associated with significant health benefits. a process for making blown glass fibers.

as well as organizational processes. as 67 . The idea is to assemble a multidisciplinary staff that can draw on industry experience. market analysis. require that we work in close partnership with our clients. are reinforced by the fact that we often hire people with extensive industry experience. has given a decidedly practical and creative feel to ADL’s culture and its work. manufacturing processes. as well as experts in the classic functional areas. The nature of the tasks we undertake. product distribution. service delivery.Leading Consultants In a broad sense. which has yielded specific products and processes. There is hardly a business decision in any industry that does not have a central technological component. We also seek people who have actually worked in operations in companies for five to ten or more years before they joined ADL. information systems. and the resulting culture. This hands-on technological focus. packaging. finance. have all been – and will continue to be – transformed by technological developments. such as strategy and operations. This approach. all businesses today are high-technology businesses. and even management itself. Product development. and our approach to them. whether we are developing and introducing a new product or restructuring an organization. We employ engineers and scientists with expertise in these technologies. environmental compliance.

and a demanding one. At the base level. In ADL’s Health Industries Practice. The Art and Craft of Consulting Consulting is a creative process. reflects the reality of business challenges: The great majority of them are inherently multidisciplinary. there are a variety of underlying skills and methodologies that support the process. But the rewards are commensurate with the effort required to meet the demands. creates a diverse culture at ADL. This. It is the interplay among these core elements that provides the driving force for innovation in that area. The fundamental approach of assembling individuals who can help a company through the entire process of innovation. Accordingly. from concept to commercialization.Inside The Minds well as the wide range of areas of expertise that may be required to address the challenges our clients face. for example. as well as consulting. of course. to 68 . and venturing. but true success ultimately depends on finding out how to build on them. commercialization. our business model for that practice brings together expertise and resources in technology development. of course. our goal is to work with clients to drive business and technology innovation at the frontiers of health and medicine.

Involve the client in the solution. a firm must provide itself with the latitude to keep strengthening its position by developing complementary areas of competency. Build a strong team. Hire the best people. Understand your niche. as I’ve mentioned. ADL. from new strategic directions to hiring and marketing. has set itself apart by its firm grounding in technology. It also sets bounds on the type and variety of cases undertaken. Communicate. for example. Within that context. Every consulting firm must first understand what makes it different from any other. for example. either in response to – or even better. in anticipation of – changes in 69 . This understanding forms the basis for every aspect of the business. The key to achieving success lies in what some might call the “golden rules” of consulting: Understand your niche.Leading Consultants go beyond them and the latest management “fads” to develop the novel ideas and insights that provide real value to a client. especially in a crowded and highly competitive market.

It may also be necessary to phase out some competencies as the market evolves to keep the business focused on the client needs that the firm is best able to meet. This process of renewal. as long as it leads quickly to a clear mutual understanding of the problems at hand and to a viable solution. must be continuous because the needs of client organizations are changing continuously as technical. economic. ‘good enough’ never is. consulting firms have sometimes been criticized for their role in creating or encouraging “fads” in business and management. Knowledge and 70 . such as re-engineering and total quality management. In the struggle to carve out a niche. indeed its only real asset. There’s an adage that says.” A consulting firm’s chief asset. weeding out unprofitable capabilities. Assembling and developing that asset is the cornerstone of success. environmental. Hire the best people. political. “When it comes to hiring.Inside The Minds the marketplace. The underlying message here is that there can be real value to consulting and. the path to get there is of lesser importance. and developing new ones within the context of the overall business focus. and social forces shape our society. is its people. In truth. many of these approaches are little more than a repackaging of the same core human and organizational insights wrapped in slightly different terminology and processes.

top consultants thrive on challenging others and being challenged. The people who are best at working with this uncertainty are the ones who stand out. They’re clear in setting and managing goals and expectations. These individuals are contrary when they need to be. Many consultants can deliver them. I take notice of individual consultants who have great people skills. and openness and flexibility in working with others. and then to manage those challenges with clear expectations as the relationship evolves – which it always does. Finally. We deal with a lot of the uncertainty facing our clients in dynamic and challenging circumstances. 71 . but that’s not good enough. especially given our company’s business model. high energy. The critical difference – the difference that makes successful consulting an art – is in the people skills. and managing change. managing flexibility. But it’s that added value that’s above and beyond the threshold that makes individuals stand out. They’re skilled at drawing out the ideas of others.Leading Consultants experience are threshold requirements. and they’re not afraid to take strong positions. the ability to make things happen. The threshold is having the expertise and the content knowledge – and we need that for certain. They persevere. the drive to achieve tangible goals and get things done. It is the combination of being able to listen well and to frame a client’s challenges accurately and concisely at the beginning.

it is crucial to determine the kinds of expertise and experience that will be required to provide a realistic solution in a timely fashion. First. successful teams are a constant reminder that the whole is greater than the sum of its parts. Team members coach one another. they put their positions out on the table in a fully candid and transparent way.Inside The Minds Further. a great majority of real business challenges are interdisciplinary or multifaceted. Sometimes this sets the stage for conflict – but it’s conflict that is always based on integrity and that often serves as the basis for a creative edge. to name just a few. Build a strong team. Second. There are two principal reasons for this. so we know where they’re coming from. In assessing the dimensions of a problem. Properly organized and managed. and marketing. challenge 72 . manufacturing technology. and to bring together a group of individuals who can meet those requirements. Teambuilding is essential to our art because it is the true foundation of innovation and creativity. may involve expertise in product development. Starting up a new operation. strategic management. for example. groups of people drive each other to be faster and more creative in arriving at a solution to a problem.

and it makes the difference. and highly creative dynamic of tackling what needs to be done and of constantly evolving interim objectives. There’s an ongoing. and remain unsatisfied until they know they have reached the top. and concerns. high-intensity. This process begins by listening. interests. We bring to the table a deep understanding of not only the client industry. while keeping the ultimate objective clear. That’s the art. The overall goal is to work not so much for a client. In the end. the client must fully understand and embrace the results of any consulting work. In the most successful situations – the cancer prevention product launch is a clear example – the team members from both the client organization and our company are so intensively focused on the process that individual credit doesn’t matter. but also of other industries from which best practices can be drawn. as well as the business and 73 .Leading Consultants solutions. demands. The best way to ensure that happens is to forge a working partnership with the client. and then to show that you have been listening by framing the challenge at hand in a way that reflects and addresses all its aspects. Involve the client in the solution. There is no faster way to win the confidence of another party than to listen to that party’s needs. but with the client.

and nurture and coach our consulting team. any client knows the operational details of the business better than an outsider does. I look on this as a dynamic process. people skills are vital. with a full understanding of the short-term and long-term implications for the firm. we know how to make things work. We check in constantly with the various players on the client staff. It is crucial to blend these skills in the early stages to set the context. After all. as well as consulting team staff. 74 . In many cases. client team members must become the “owners” of the end results. Again.Inside The Minds technology operations – in short. it is best to build a team that specifically involves client staff. like a living organism. so that there’s a good match and fit with the task at hand and with the ongoing relationship beyond it. to go above and beyond what’s expected. This guarantees that the all-important client perspective and expertise is available throughout the evolving course of a project. but it remains important throughout the entire project. It is important to recognize the different strengths and weaknesses in individuals. that takes a lot of care and feeding. And we have to give all the individuals involved opportunities to stretch themselves. on both the client staff and our consulting team staff. Moreover.

During the course of implementing a strategy. Excellent communication begins with a clear mutual understanding of the goals and approach to any project. communication is critically important because of the dynamic and evolving nature of most consulting projects. Integral with involving the client and building effective teams is communication. In client surveys conducted at ADL. leading to further insights in clearer directions. and emerging technologies. the action of summarizing progress and reporting results actually stimulates and enriches the process of synthesizing those results. communication is often cited as the most important aspect of a relationship. political developments. It continues with regular updates to establish and manage expectations. market conditions. More often than not. including economic conditions. it is not uncommon for the project team to uncover entirely new aspects of a 75 . Perhaps more to the point. either as the key to a success or as an area for improvement. operational results. it is not uncommon for a variety of aspects to change. an ongoing exchange of information between parties – including updates from both the client and the consulting firm – and presentation of the results.Leading Consultants Communicate. Given that consulting is also a discovery process.

and make adjustments toward revised goals. At ADL. as well as strategy and planning and day-today management. as well as cross-industry. designed to be complementary in nature to a typical business operation. frame expectations. specialized management and organizational knowledge. Most companies hire individuals with the particular areas of expertise required to manage the routine aspects of their business effectively. 76 . This requires close communication among team members and the sponsoring client to keep all apprised of developments. in fact. providing industry-wide. we assemble a staff of individuals with the broad range of relevant areas of expertise required to help a client change or innovate. the firms that tend to achieve the greatest benefits are those with whom we have long-term relationships that cut across more than one of our areas of expertise. perspective. This can include research and product development. and familiarity with a broad variety of technologies and the dynamics of start-up operations.Inside The Minds challenge in the midst of addressing it. Relationship Management Although ADL has a broad spectrum of relationships with companies of many sizes and from a wide variety of industries. A consulting firm is.

and satisfy the client’s defined needs. or if we’re working with a client again after a long absence. and the relative importance of filling each of those gaps. where the gaps are.Leading Consultants Given the wide spectrum of possibilities. it is impractical for client companies to maintain such a staff. Whether we have had a long-term relationship and many engagements with a client. how to get it done. and how to manage expectations. or we are starting a new relationship. So we’ve developed further capabilities and connections that will keep us at the front edge of innovation in those fields. we already understand what its greatest needs are and where those needs have the best fit with us. We estimate the timing and then determine explicitly what to tackle. we frame the needs so that we understand the client’s objectives. When we start working with a client organization. our direction. we focus on the specific needs of the client. 77 . evaluate results. In a new relationship. we do our homework. for example. to work with some of the leading biotechnology players in the health and pharmaceutical industries. We determine whether this client organization is a good fit with our strengths. measure the value. what the client is able to address on its own. We have set a goal. In this process. and our portfolio of services.

Each party develops a deeper appreciation for the other. And in some cases. First. and a stronger sense of mutual buy-in emerges. melding perspectives and areas of expertise from each party. as well as ADL staff. we have some consistent ways to frame the client’s challenges.Inside The Minds A key goal in developing a relationship for the longer term is to build a true partnership. we develop the mutual understanding and respect that allows us to move on to more – and more varied – engagements. the partnership model greatly enhances the effectiveness of a relationship. communication improves. For the clients with whom we have a longer history of engagements. and building both formal and informal lines of communication. Once we start working with a client. Teamwork is critical in forming and cementing these relationships. we make sure we help them with their technology and product portfolios and with the new growth arenas they’re charting or developing. Once we have worked jointly on a project in teams made up of client representatives. there 78 . Even in shorter-term projects. we’ll also help clients form alliances with some of the hot new leading technology players. extending their relationships to a broader network. In both the short term and the long term. it is important to work in close conjunction with a client firm.

energy. we bring in staff to help discover where there might be solution ideas from leaders in other industries who have already been working to solve the kinds of problem our client is facing.Leading Consultants is timing. We determine how important the need is to the client’s near-term or longer-term strategic priorities. In many instances. We develop a clear understanding of the expertise we have on our team. We also consider where the problem lies – within a defined business or operating unit. 79 . chemicals. for example. We consider which elements of our capabilities will be needed: Is this a strategy or an organizational set of issues? Is it more operational. Certainly. or maybe environmental management? What are the elements of the problem that might lend themselves to product development technologies? We also size up the problem in terms of where we might find sources for good ideas and solutions. or even potentially outside the enterprise. We work to understand the dynamics and complexity of who has to be involved to achieve results. we have staff who know the industry domain. across multiple groups of the client’s organization. or is it related to R&D management or product management or innovation management. whether it is healthcare. But we may also have staff who have actually worked in this client organization itself and who understand its dynamics and culture. or telecommunications.

it is important to read both broadly and deeply. technology. seeking new ideas and insights as they emerge around the world. The intellectual and practical satisfaction of maintaining that edge. which highlights the achievements and thinking of our staff. however. Being an international firm is a real plus in this regard. In addition. and professional publications. the action of writing white papers and articles is important because it is an opportunity 80 . And indeed. is one of the great rewards of the profession. as well as those of our client partners. and research. including ADL’s own publications. because it allows staff to keep abreast of trends and developments in markets throughout the world through clients. Many consultants also write for leading industry.Inside The Minds Maintaining the Creative Edge Because of the accelerating pace of change in the world business community. it is not uncommon for firms to prepare white papers on key topics and trends in industry. Because of the many dimensions of the problems we address. colleagues. developing and maintaining expertise is a constant challenge for a consulting firm. such as Prism. and society. Most consultants tend to read voraciously. business. in the international research community. It has often been said that writing is thinking. as well. and in society in general.

Networking is a must. and new areas of expertise. new experiences. every case a consulting firm undertakes is a learning experience. 10 to 15 percent) is critical to renewing and enriching the talent pool with high performers. One of the key “people skills” consulting staff must have is the ability to maintain a strong 81 . a minimum level of turnover (say. A key function at many firms is knowledge management – the organization and cataloguing of case experiences for use as a proprietary resource in future cases. Obviously. It is essential for an organization to capture the essence of its experience and insights in a form that remains within the company in the inevitable event of staff turnover. In truth. but at the same time. Staff turnover is common throughout the consulting profession as individuals pursue new or different challenges at other firms and in other industries. Regularly bringing in fresh faces and fresh minds helps keep an organization on its toes and provides opportunities for it to adapt quickly to a changing world.Leading Consultants to synthesize the broader lessons emerging from our work and to keep our own name associated with thought leadership in the key fields that are important to us strategically. It is also often a net gain for a company. this turnover is sometimes inconvenient. since it brings in new ideas.

alumni. Through these contacts. When you hire a good consultant. perspective. consultants learn. contacts. and others. and they “put it together” in new ways. These software packages make it easier for teams to set goals. including an ADL spin-off. they absorb information. synthesize data. share information. they see patterns. and assistance. report progress. Such a network keeps you abreast of current thinking.Inside The Minds network of relationships with other firms. you’re getting that individual and his or her range of networks with business and academia that keep fresh ideas and fresh perspectives flowing. have developed Internetbased tools for complex project management that allow disparate groups to work together in real-time on multifaceted projects. The hunger for learning what’s out there and hearing what others are doing and challenging what others are thinking is a key part of the consulting dynamic. and it can also be used as a resource for advice. leading to new insights and approaches. universities. A whole host of collaborative tools are now appearing that help consulting firms maintain their edge. talking and listening to a variety of companies. journalists. not all of whom are our clients. A number of firms. It takes tenacity and discipline to make those calls. Staff must stay deeply in touch with the marketplace. and respond dynamically to 82 . but it is necessary to keep checking in with those networks.

as well as those rising through career stages. as well. or the last great lesson of the previous century. but also of what we can do better. we also run best-practice surveys. ADL maintains a well-defined process for soliciting and assessing the client’s views of our performance. as it is a regular and formal channel designed to keep a flow of new learning and experience coming into the company. This is either the first great lesson of the 21st century. With the accelerating 83 . conduct a number of our own business roundtables for executives. of course. Finally. attend meetings. that help a consulting firm stay sharp. client feedback is a crucial aspect of the process of staying at the competitive edge. occasionally sponsoring some of their initiatives and research. and it serves to spread our experience to new staff. From time to time. and stay in touch with universities.Leading Consultants inevitable changes and new developments during the course of a project. not only of what we are doing right. Leadership and Management in Turbulent Times We now live in a world where all times are turbulent. Training is important. This presents a clearer picture. run workshops for our clients and others. As many firms do. There are other practices.

and more mature industries struggle to adapt or reinvent themselves. and technological developments in today’s world. we must be prepared to assess the importance of these changes for our clients. Change – advising about it and managing it – is the particular province of consulting firms. as well as in advising others. but our own organizations and strategies can be buffeted by it as much as those of our clients can. change has become the norm for all businesses. can help a company maintain a steady course in the midst of the push and shove of today’s competitive marketplace. new businesses and industries emerge. This. as we seek to understand the nature of emerging developments and how to either accommodate them or leverage them in an innovative fashion in the marketplace. both for consulting firms and for our clients. of course. A particular challenge for our industry is to stay a step ahead in the management of our own businesses. advances in science and engineering open up promising business opportunities. summarized below. social. As the economy goes through its cycles. political.Inside The Minds pace of economic. environmental. presents a host of challenges and opportunities. 84 . A few key elements.

Leading Consultants

Leadership In becoming a senior leader at ADL, it has been important for me to embrace the differences between management and management consulting. After all, running a company, even a consulting company, is not the same as running a consulting project. As I mentioned, the skills and insights of consultants are complementary to those of the clients we serve. Consultants provide the knowledge and experience in management and technology required to help firms innovate, adapt to change, or anticipate change. This requires both broad and deep context in technological developments, industrial practice, company operations, local and national economies, and organizational change. Just as the best coaches in sports were not necessarily the best players, the best managers are not always the best management consultants. Nonetheless, the lessons of consulting have much to bring to the task of leadership as we face the challenges and opportunities of a turbulent world. Applying our own insights and experience to ourselves, however, is easier said than done for organizations more accustomed to dispensing advice than receiving it. Moreover, consulting firms have an inherently outward professional focus, concentrating with such energy on client challenges that internal needs may be neglected.

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An overriding philosophy of mine is that a leader should be the servant to the organization as a whole. The leader should serve in a manner so that the group as a whole does better – advancing, achieving its goals, and promoting good organizational health and vibrancy. As in other businesses, a leader of a consulting firm must have a vision, both personally and for the organization. You must be deliberate and effective in execution; and you must have strong people skills. You need to be good at both listening and building consensus as you’re building a team. But you also have to recognize when decisions have to be made at the expense of consensus. Shared Values Successful teams go through the hard work of understanding the characteristics, qualities, and shared beliefs inherent in the work they are doing, and the goals they’re striving to achieve. They agree on the roles, the expectations, the contributions of the team members, how they relate to each other, and how they participate as a team. And they have a common major goal or vision that will stretch their capabilities, and the flexibility to do what it takes, playing full out, to reach it. ADL’s shared values, which have emerged from our long history, include a genuine drive to innovate, a passion for
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excellence, a spirit of collegiality, and a commitment to integrity. These values have consistently formed the underpinnings of our approaches to the marketplace as they have evolved over time. More to the point, they have been vital to the company’s success over the years, and they are a crucial part of what attracts and holds employees. The company has been able to preserve and institutionalize the core values that have sustained us through many changes and, indeed, have become part of the ADL brand. Balancing Strengths Smart consulting organizations maintain a portfolio of clients and industries, so that at any time, there is a mix of industry sectors and client organizations that can help the firm through normal client business cycles. It is also useful to maintain a range of services, some of which may be more appropriate for helping a client through tighter times and some of which can help a company take advantage of better times. We have deep strengths in both the energy sector and the telecom sector, for example. A few years ago, when the energy sector was having a tough time, we did a lot of work to help our oil and gas clients solve some of their problems. With most of those problems resolved, there were some lulls with those clients, and we redirected our focus. Then the telecommunications business started on its massive
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growth cycle. But in the last several months, the telecommunications sector has been facing some rough times, and we’ve shifted our focus again to those clients with current needs we can meet. At the same time, we’ve had very strong energy business because the energy sector has been growing and once again becoming highly profitable. Balancing strengths is inherently a dynamic process. Not only do businesses go through cycles, but the underlying technologies driving innovation spring up, mature, and fade away. A balance of strengths is also crucial to the client relationship-building process, which remains important at all times, whether the company is doing well or tightening its belt, and whether we are engaged in a specific project or not. By keeping in touch with firms at all times, we can keep aware of the challenges they are facing and offer our assistance where our current or emerging capabilities overlap their needs. Setting Business Goals Goal setting is a constant iterative process. Setting goals for the company is an activity we periodically refresh through think sessions and work sessions with our top staff. We have brought in not only the top leadership team, but also
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the most provocative thinkers in the business as part of our periodic strategy, budget, and operations planning. We cascade these plans and goals through the business in a way that invites input and response, a process that enriches the vision and direction of the company. It also helps set the context for, and promote clearer understanding of, more specific goals, measurable objectives, and the metrics we use to track the business. Communication We constantly reinforce goals and objectives – and our values and accomplishments, as well – in our communications to staff. The head of global communications for our company works very closely with me and with our business leaders to frame not only our internal communications to staff, but also our external communications, along the major dimensions of our business strategy, operations, and achievements. Ours is a people business, and we are constantly evolving, refreshing, and communicating our plans and seeking input from staff. Keeping open channels of communication, both formal and informal, is essential in a business that relies on the cooperation and participation of a network of partners and associates.

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Some of these gambles will not pay off as well as others. ADL invented the field of flavor analysis. given a free rein. healthy practices to count on. if at all. Such experimentation can pose risks. you are often looking for people who. approaches. For example. More recently. but it can also lead to better job satisfaction for the innovators. Although it is essential to have dependable. in the early to mid-1900s. Similarly. Hiring is another form of risk-taking. But a considered strategy of risk-taking can go a long way toward promoting longterm success. 90 . In hiring individuals.Inside The Minds Taking Risks Taking risks is the key to anticipating the future. We were also the first to develop the concept of environmental auditing in the 1980s. or markets. can go the extra mile in developing novel approaches to addressing client challenges. better results for the clients. it is important to maintain enough flexibility in a consulting organization to allow individuals to test new ideas. we must also take risks to push out ahead into new domains or growth areas. and new opportunities for the company. which led to a significant portion of our business. the firm has been active in creating and spinning off companies to capitalize on ideas generated in-house or in partnership with other firms.

Leading Consultants

The Future of Consulting In 1886, Arthur D. Little, who dropped out of the Massachusetts Institute of Technology after just three years, founded a company with the idea that industry may, from time to time, need help in exploiting the potential of emerging technologies in their businesses. And indeed, technological advances – in everything from plastics and pharmaceuticals to computers, electronics, and new approaches to manufacturing – formed the cornerstone of a vast variety of business innovations in the 20th century in virtually every industry. Today, more than ever, technology remains the cornerstone of business innovation, with an increasing pace of developments in a growing range of areas, including semiconductors, biotechnology, telecommunications, renewable energy, and advanced materials, to name just a few. These advances have had, and continue to have, major implications for strategy, organization, product mixes, marketing approaches, and new business development in industries ranging from retail to energy resources. This accelerating pace of change, coupled with increasing worldwide competition, means that there is a growing need for business to figure out how to make use of these advances – some of them happening in their own labs – to gain an edge in their existing operations or to move in entirely new directions.
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Information technology, with its exceptional potential for widespread application in business through computers and software, was the first technology broadly embraced as a specialty by the consulting industry. In the late 1990s, an enormous new consulting market burst on the scene to help companies exploit the power of telecommunications and the Internet, an outgrowth of information technology. Promises and expectations outpaced reality, however, leading to a collapse of the market and casting a pall over the entire consulting industry. This dot-com bubble, however, underscores the strong need for organizations that can cut through the hype to provide realistic and substantive advice on the potential of emerging developments. There is no question that the Internet and telecommunications advances have transformed business worldwide, and that they will continue to do so, but reaping the rewards of this transformation will require a keener understanding of a broad combination of underlying technical, management, and communications issues. Many of the dot-com firms that sprang up to exploit this technology had a great deal of technical expertise, but not enough knowledge and experience in business and management to be able to capitalize effectively, or to help their clients capitalize effectively. On the other side, many client companies grasped the upside business potential, but
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hired the dot-com firms to help them because they didn’t have the technical expertise to exploit it. The combination, fueled by bright expectations, was a disaster. One of the legacies of the dot-com phenomenon is that companies are looking for the depth and quality found in the more mainstream consulting firms. Moreover, they are looking for consultants with more solid business experience. The days of freshly minted MBAs advising corporate giants are in the past as today’s clients seek consultants who have had the time to hone their skills and insights both in industry and in the consulting business. As we continue into the 21st century, it will be ever more important for companies to work with consulting firms to sift through the burgeoning array of emerging technologies to determine which are commensurate with their goals, and how they can best fit into their business. Technology, after all, is not an end in itself, but a means to an end. The real goal is to incorporate it as an appropriate element in an overall business or strategic plan. Especially exciting will be finding ways we can move technology applications from one arena to another to enable us to open new frontiers. It is interesting to note that it was not the makers of vacuum tubes who recognized the potential of semiconductors – it was entirely new companies. And when biotech burst on the scene in the
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mid-1970s from university labs, it caught many established pharmaceutical companies by surprise. Applications of computers and semiconductor chips are expanding into new areas on an almost daily basis. And information technology is a crucial element of such emerging fields as bioinformatics and proteomics. The ability to harness those opportunities will depend on people with deep expertise in those areas and who also have the skills – people skills and implementation skills – to work with multiple, diverse groups to make it happen. We are going to see more and more companies realize they can’t solve all their problems by themselves. We’ve seen a myriad of merger and acquisition waves in every industry, as well as different patterns of alliances and partnerships. Many have achieved the minimum, but overall, results have been disappointing. There will be a lot of new effort to work across enterprises to harness existing skills, insights, innovations, and technologies and to explore ways to chart the path for turning these relationships into exciting, valuable, and profitable business propositions. More broadly, a key challenge to consulting firms will be to deliver clear value to their clients. Particularly in tighter economic times and times of mounting competition, client companies want to ensure that they receive significant benefits for the money they spend on consulting. Today is not a time for fads, but for results.
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In the past, a company might have been able to make a promise to a client on the basis of image and reputation. But today we are being challenged to be more and more explicit around managing and demonstrating that value proposition. Our ability to deliver on that value proposition with assurance is based both in hard economics and in the quality and depth of the personal relationships that make up the partnership between a consulting firm and a client. The demand for more substance and accountability reinforces the need for more consulting firms to develop working partnerships with clients, getting immersed in implementation, as well as analysis. To accommodate the complexity inherent in business challenges, these partnerships may involve other parties with complementary expertise as well. The “arms-length” relationships of the past are likely to become less prevalent. It is increasingly clear that what may be a new and fresh insight today, and might in previous years have had a halflife of three to six months, can now be out of date in a matter of weeks. Those who will succeed are the individuals or firms that are the best at anticipating the next set of changes, adapting to them, working effectively across enterprises and many types of people, putting ideas into practice, being accountable for results, and moving on to meet the next set of changes. Successful consultants will be

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Inside The Minds able to help client companies place their bets and take their options. Little for 21 years. She has served on the firm’s board of directors since 1998. The winners will be the ones who have the flexibility and the creativity to shape their approaches to meet each demand – even as they are grasping the changing needs and the emerging opportunities. product management and launches. where she managed large-scale projects for multi-national clients in the pharmaceutical and medical products industries. she has served as head of ADL’s North America Management Consulting operations and leader of ADL’s Global Health Care Practice. McNamara’s areas of professional expertise include operations. As acting CEO. 96 . supply chain management. Ms. During her tenure at ADL. restructured ADL’s management consulting operations. and improved the company’s profitability to the point where it now maintains a healthy backlog of sales. McNamara cut corporate costs by nearly $20 million. Pamela McNamara became CEO in August 2001. A consultant with Arthur D. and business process redesign. There’s no single answer or approach in a world such as this.

Leading Consultants OVERLAP YOUR CIRCLES: MAXIMIZING THE THREE ELEMENTS OF THE STRATEGY CONSULTING BUSINESS DR. Senior Vice President 97 . CHUCK LUCIER Booz·Allen & Hamilton Chief Growth Officer.

first and foremost. With all the pressure on short-term performance. But there’s no shortage of smart. analytical experts across leading firms like Booz·Allen. about helping people succeed – people inside client organizations. come first. and empathize with their challenges. A firm’s success depends on the sincere desire of its consultants to help others succeed. and Profits The consulting business is. as well as people at your own firm. who will collaborate with them to develop and implement a successful answer. Trust grows out of mutual success – collaborative efforts in which the consultant helps the client’s organization repeatedly achieve significant performance improvements. Clients. Enjoying and enabling successes by other people has always distinguished truly great consultants.Inside The Minds People. deep expertise. Booz·Allen’s market research confirms what any successful consultant knows: Senior executives select consultants whom they trust to work with them. of course. They need consultants who will listen to. Successful consultants combine the ability to help the client organization win with a sincere interest in helping individuals within the organization succeed. understand. of course. executives can’t afford consultants who merely rubber-stamp their ideas. and analytical skills all matter. Intelligence. Passion. 98 .

A client I’ve worked with occasionally during the past 15 years called recently and said. I’ll help them grow and have the most successful possible career – whether at Booz·Allen or elsewhere. During the recruiting process. We’re considering a major acquisition that will make or break our business. In my own career. 99 . The fun part is challenging people to stretch. Helping people inside the firm matters too: The best colleagues. We try to stimulate rapid. Many of my colleagues at Booz·Allen – as well as many of my clients – are people to whom I have kept that commitment. that requires time and commitment on the part of senior consultants. Can you be involved personally? I trust you. I promise that if they join Booz·Allen.Leading Consultants A consultant’s best clients are always those people he or she has already helped succeed. I make personal commitments to people we would like to hire. like the best consultants. are the people you have helped succeed.” It doesn’t get better than that. By putting the client’s needs first – those of the individual and the organization – the consultant ultimately becomes a trusted advisor. Of course. “I really need your help. We (and other top management consulting firms) recruit truly amazing young people. to try to accomplish more than they think they can. continuous development in everyone at Booz·Allen. I know that I grow and learn every day.

the more they can do. but consulting is a business. one of the founding partners of Booz·Allen & Hamilton. Fifty years ago. need apprentices to help get the work done. like the master craftsmen of old. Consultants. especially strategy consulting. and Marvin Bower. Altruism didn't motivate master craftsmen in medieval guilds to take on apprentices any more that it motivates me to recruit new associates. but it’s enlightened self-interest. the more I can concentrate on the activities that I do best. helping people is good business. and the more our team will succeed. is an apprenticeship business: People learn consulting skills by observing great consultants and by assuming increasing levels of responsibility under the watchful eyes of experienced seniors. Like any other business. As it turns out. we measure our success at the bottom line. Profits matter. freeing up the “experienced master” to concentrate on the most demanding tasks. the man who shaped McKinsey. engaged in a famous debate about the 100 . Jim Allen. The more I can help my colleagues develop superior skills. The more skilled an apprentice becomes. Helping others grow is not only fun.Inside The Minds Consulting. Profession and Business Make no mistake: The starting point may be helping people.

insisted that the consulting firm. and the development of ideas in its industry. Allen argued – consulting firms must offer attractive value propositions to all of their stakeholders. Like any successful business – like our clients. It doesn’t matter where you start – a profession doing the right thing or a business offering attractive services – the answer is the same. its people. he argued.Leading Consultants fundamental nature of consulting: a profession or a business? Bower. Allen and Bower were both right. the business would take care of itself. 101 . They deliver shortterm performance while transforming themselves for longterm success. Allen took the opposite position: Consulting. If the firm fulfilled the obligations of the profession. like a successful law firm. should focus on doing the right things – for its clients. is a business. arguing the side of consulting as a profession. One of the joys of consulting is that doing the right thing is always the right thing. But a real understanding of the consulting industry requires the same discipline that strategy consultants bring to their client work. People matter. Profits matter.

Each of the large strategy firms derives the majority of its revenue from one or more of these other types of service offerings: McKinsey from overhead value analysis (overhead cost reduction). and Bain – focus on developing unique answers to problems with the highest risk and the greatest long-term impact. and what I call “application consultancies. It confused recruits. and pricing strategies. I group large consulting firms into three segments. It confused consultants. technology – never made sense. We tackle other strategically important problems that require unique solutions – e. organization. strategy consultants don’t limit themselves to business unit strategy. As a strategist. Business unit strategy is the prototype. superior profitability requires a strategy distinct from competitors.” Strategy firms – McKinsey.. customer relationship management. each with different economics based on different approaches to different sorts of problems: strategy firms. Sustained. Clients will pay premium prices to strategy consultancies that help craft and implement unique. It confused our clients.g.Inside The Minds The Structure of the Consulting Industry The traditional segmentation of the consulting industry – strategy. accounting consultancies. operations. BCG from 102 . Boston Consulting Group. grounded in underlying economics and skillfully executed. competitively advantaged strategies. Of course. Booz·Allen & Hamilton.

. The broader the scope of a given standard approach. the greater an accounting consultancy’s revenues. computer programs unable to deal with dates after 1999) or 103 .g. Strategy firms seek to work with the people inside organizations who make or support strategic decisions.. Typically involving the selection and implementation of information technology. and strategic planners. rather than unique solutions. Deloite & Touche. The accounting consultancies – Accenture. this meant a fairly small group of people: the CEO. links to legacy systems).Leading Consultants reengineering focused on winning through time-basedcompetition. Andersen. COO. and Price Waterhouse – use standard. these kinds of operational improvements require some tailoring (e.e. Today. because intensifying competition and flatter organizations have pushed strategic decisions to a broader set of individuals within client organizations. business unit general managers (BUGMs). A decade ago. the majority of revenues for these types of firms accrue from a single business problem – such as Year 2000 (i. repeatable approaches to help clients achieve operational improvements quickly. In some cases. and we at Booz·Allen. with minimal risk and at reasonable cost. but focus primarily on delivering general capabilities. for supply-chain management and cross-functional solutions. we have the opportunity to work with a larger and more diverse set of people within any given organization.

about eight staff per partner. Outsourcing of corporate information technology departments or scale-intensive overhead functions has also been a major growth engine for these consultancies. CIOs are making fewer decisions about consultants. Whereas strategy consultancies have. the CIO was the one functional executive who spent significant consulting dollars. 104 . is by generating fewer margin dollars across a much larger number of staff.Inside The Minds the installation of enterprise resource planning systems. on average. accounting consultancies have about 35 staff per partner. In that environment. As line managers have become more computer literate. and clients with the prices they expect. Traditionally a very lucrative target. and the accounting consultancies are focusing more and more on business unit general managers. Accounting consultancies target the CIO and other functional managers. The low leverage ratios of strategy firms enable senior staff and partners to stay intimately involved with the details of analysis and recommendations. standardization is the only way to ensure quality. In contrast. the high leverage of accounting consultancies defines their economic model: The only way to provide partners with the compensation they want. The economics of accounting consultancies depend on standardization. such as SAP or Baan.

the ones I call applications specialists – AT Kearney/EDS.Leading Consultants The third segment. 105 . The majority of these “firms” are single individuals – consultants who have left large firms and are now on their own or retirees who are now consulting to their former employers. E&Y/Cap Gemini. or applying the hardware or software – for example. IBM. The typical consulting activities include selecting. accelerates customer use of the latest releases of the hardware or software. consulting supports the base business: It creates demand for their hardware or software products. defined either by industry or by functional area. SAS consultants helping a client’s marketers use the software for data mining. SAS – are the consulting divisions of hardware and software companies. HP. The principal advantages of these firms stem from their size: minimal overhead and the human scale where everyone knows everyone else. The remaining small players concentrate on one or two specialties. and generates an additional revenue and profit stream. For these companies. installing. In addition to the three segments of “large” (more than $250 million in revenues) consultancies. raises the customer’s cost of switching to competitive hardware or software. increases the value that customers receive from the hardware/software. a plethora of small niche players represents about half of the consulting industry’s revenues. Oracle.

And third. First. It’s hard to maintain a balance of selling and doing. ensuring better use of all of the staff. small firms provide suboptimal development opportunities for people: the chance to work extensively in one area. And it’s hard to pay the bills when the rainmaker is in the selling phase of the cycle. another individual decides to become an independent consultant. the many rainmakers at large firms move through different cycles. As a consequence of these disadvantages. they suffer from “feast or famine” cycles: Individual rainmakers tend to alternate between periods of intense selling and periods of doing the work. small firms can serve only a limited portion of the market. In contrast. since they have neither the breadth of skills required nor the necessary geographic footprint. 106 . but not the opportunity to develop the broad skills that enable a person to become a general manager.Inside The Minds Small firms suffer three significant disadvantages. Since major corporations represent more than 75 percent of the consulting market. small consulting firms experience enormous turnover: One individual may consult for two or three years and then move on to something else. Second. small firms can’t help major corporations affect change globally.

followed by the accounting consultancies. In the slower-growing strategy segment. remaining focused on strategy. each firm has taken a different approach to IT. Technology. Since McKinsey’s acquisition of a small IT firm (ICG) failed. Information technology has either enabled or driven most companies’ strategic priorities for the last 15-20 years. particularly information technology. 107 . BCG continues to eschew technology. McKinsey has tried. unsuccessfully so far. changes in how we serve clients. Bain accesses IT skills through a series of alliances called BainNet. they have gone back to trying to develop the skills organically. has become pervasive in business. Booz·Allen has created a strong information technology business linked to our strategy work: Information technology represents one-third of our revenues with commercial clients and an even larger proportion of our work with government clients.Leading Consultants The Evolution of the Consulting Industry Three broad trends are reshaping the consulting industry: the growth of technology. to do the same. IT-related consulting has accounted for much of the consulting industry’s growth. It’s no surprise that applications specialists represented the fastest-growing segment during this period. As a result. and consolidation.

rather than in terms of new serviced offerings introduced. we provided clients with advice that we delivered in reports. But it’s far more powerful to think in terms of changes in the nature of value-added by consultants. People usually talk about these waves in terms of new service offerings. during the 1980s. Understanding and buy-in at client organizations increased.Inside The Minds The second. such as business process reengineering (BPR) or e-business. a CEO who had been a client for many years said to me. The next three paragraphs. During the late 1980s. When I joined the industry in the 1980s. consultants began including clients as integral members of the consulting team and embracing change management disciplines. While I’m proud that most of my clients implemented – or at least tried to implement – my recommendations. But they still struggled with interpretation and implementation. Advice. of course. still constitutes an important part of the consultant’s valueadded. less obvious. “At the beginning of 108 . the industry-wide reality was that most recommendations weren’t implemented. For example. trend reshaping consulting is successive waves of change that have transformed the very nature of our work with clients. while deliberately oversimplifying the industry. Clients genuinely tried to implement most of the industry’s recommendations. describe these changes. toward more and more value-added. But the center of mass of consulting activity has shifted in a fundamental way over time.

I think that I’ve finally figured out what you meant by this dot point. Second. The dot-com crash brought this wave to a premature conclusion. It’s analogous to the old Chinese proverb: “Give a man a fish. We worked with clients to build capabilities – the knowledge. consultants moved beyond capability-building and began partnering with clients to develop the business itself.” In the most recent wave. by working together with the client to affect change. teach him to fish. Fees increasingly became a function of the client’s results or an equity share in the venture. business processes. consultants began directly helping clients change the way they did business. contributing to the recent slowdown in the growth of the consulting industry in the United States. and supporting information technology required to deliver value to their customers. and you feed him for a lifetime. 109 .” He pointed to a page in the report. Clients benefited in two ways. First. and you feed him for a day. shifting from giving clients answers to improving ongoing performance provided greater recurring benefits. “Am I right? Is that what you were saying?” In the BPR wave.Leading Consultants every month. we closed the gap between interpretation and implementation. I re-read the strategy you did for me three years ago. e-business.

For example. of course. CARTA.Inside The Minds The third trend changing the consulting industry is consolidation. however. and together we’ve significantly increased our share of the global business of multinationals based in Scandinavia. But a far more lasting trend is mergers of medium-sized firms that are extremely strong in one geography. the concentration ratio in the consulting industry didn’t change: The proportion of the industry’s revenue represented by the top five firms. Pressure on medium-sized firms is. no merger of two major consulting firms has been successful in the long term. broad consolidation in the consulting industry will be very slow because the mega-mergers that are the principal vehicle for rapid consolidation in other industries don’t work in consulting. merged with Booz·Allen. or service offering with larger consultancies. provides the most spectacular examples of the pressure on mediumsized firms. or the top 50 firms didn’t change. the number of firms with revenues of $25 to $300 million has dropped significantly. From 1960 to 1995. In my view. industry. Mergers may 110 . the top ten firms. such as Scient and Viant. two years ago. Financial pressure and falling revenues are contributing to the decline of medium-sized consultancies. The merger has been extremely successful: CARTA retained their local client base. one of the leading management consultancies in Scandinavia. The collapse of e-businessoriented consultants. During the past six years. a classic symptom of industry consolidation. However.

customers. the median “above average” performer among the S&P 500 sustained annual earnings growth of 19 percent and annual revenue growth of 12 percent – three times the growth rate of the global economy – while also addressing the greater expectations of workers and citizens. what’s the value of a firm without its best people? The Future of Consulting What is the future of consulting? Changing client demands are fueling a fundamental change in the consulting industry. But once the earnout period is complete and the principals leave. Increasing an organization’s ability to change to meet the rising demands of all stakeholders is the challenge for leaders.Leading Consultants succeed for a few years. 111 . in the United States during the decade of the 1990s. fast – results that contribute to a company’s competitive advantage. For example. shareholders. while the principals of the acquired firm continue to drive the business.to five-year earnout. the value of the acquired firm plummets. Clients are demanding increasingly tangible and lasting results. and the best employees need and demand more rapid improvements in performance than organizations naturally produce on their own. the acquiring firm typically insists on a three. In a people business. ensuring that the principals are active initially. Today.

One client told us last year. understanding the possibilities and limitations of technology is crucial to the development of strategy. “The old ways just don’t work any more. The old paradigm – developing insight first. realizing the benefits of technology requires interrelated changes in strategy. The change in paradigm implies a redefinition of the consulting industry. Paradoxical elements need to be synchronized and harmonized. The most effective strategies evolve through a series of actions that create and exercise options. organization.Inside The Minds Consultants face the same challenge: We have to raise our game to help our clients raise their game. and focusing on growth later. they no longer have the luxury of addressing issues sequentially – dealing with cost reduction during a recession. Traditionally clients hired strategy consultants to create insight and accounting consultancies to help with actions. acting second – no longer makes sense. They need immediate performance that will yield lasting advantages. for example. Accounting consultancies implemented systems that created no business value. For example. It was never an effective division of labor.” Clients need clear solutions in our complex world. operations. We need ideas and actions. and marketing. each major decision both stimulates new strategic insight and drives near-term actions. strategy consultants sometimes 112 .

fees depend more on the value that clients receive – either because fees are explicitly tied to results or because the consultant has an equity share. Bain and Accenture are leading ongoing changes in the industry’s fee structure. consultants are motivated to accept engagements not only where they are confident of adding great value. Today. consulting has been one of the most innovative industries—delivering both significantly greater benefits for clients per dollar of consulting spend (which has fueled double digit growth) and also increased 113 . Bain has been the industry leader in non-traditional pricing. clients need consultants that truly combine strategy with technology and insight with action. Increasingly.Leading Consultants created recommendations without recognizing the difficulty of implementing them. pricing in the consulting industry is in the midst of irreversible change. consultants who always deliver high-quality work earn more. but where they believe the client will be able to make the requisite changes and realize the benefits. Management consultancies traditionally charged fixed fees or weekly rates based on the number of expected hours a team would work. With the shift toward delivering more tangible value. Clients avoid paying big fees for unsuccessful consulting engagements. Aligning client and consultant incentives is a win-win. starting with Bain Capital (an LBO fund) 20 years ago. For the past 40 years.

The industry’s future depends on continued rapid innovation. The biggest differences. The Consulting Culture Consulting firms have remarkably different cultures – “remarkably” because we’re all in the same business. strategy consultancies strive for two degrees of separation between people in the firm: Partners all know each other. The number of partners is much larger. and we perform similar analyses. we communicate in similar ways. organization structure. Strategy firms organize and operate around their partners. are between segments. and we hire from the same places. partners can’t all know each other. the application consultancies are 114 . of course. given their focus on standardization. There’s no doubt that significant innovation will occur. anyone can reach for anyone. But which innovations will be most powerful and which consultancies will benefit the most are open questions. each partner knows the eight staff nearby. and formal processes. we serve the same clients. “Know Who” institutions. emphasize size. accounting consultancies. The differences are also remarkable because we all put clients first. and most of the firms employ formal tiers.Inside The Minds compensation for consultants. where some partners have more rights than others. Finally. In contrast.

I can be a square peg in a round hole. 115 . We embrace the diversity. We’re very much alike. significantly more hierarchical and process-disciplined than the strategy or accounting consultancies. right or wrong. and that’s a good thing because it lets us have the kind of impact that changes the world. We buy all of our suits at the same place. As a result. we also have many people who wouldn’t work at one of the other strategy consultancies. The cultures are just different. “The great thing about this place is that we’re all different. within the strategy consultancies. The projects I learned the most on are the ones that are outside of my area. We have people who could fit at firms in each segment. For example.Leading Consultants divisions of major corporations.” Booz·Allen is at the other extreme – far more heterogeneous than any other large firm. We spend all of our time together socially.” Booz·Allen allows – actually requires – people to shape their own career paths and find mentors committed to their success. “We are a team with a unique view of the world. It’s not a question of better or worse. The Booz·Allen culture says. The differences in culture within each segment are nearly as great as those across segments. Bain in the early 1980s embraced a culture that said. I love to work with all these people who know stuff that I don’t know. in any of the three segments.

. operate locally.e. that help to stimulate beneficial change in the client organization. Booz·Allen operates transcontinentally (i. and 116 . There are greater opportunities to specialize in an industry or functional area and to learn from a broad variety of people. or across Europe). based on objective analysis. across the U. In contrast. we did it sequentially: first. objective analysis. some firms. Wherever possible. like McKinsey. then. Twenty years ago. people are staffed on engagements near their home cities. development of recommendations. development of workable recommendations. The good news is that a person has a better chance of finding an opportunity that matches what she or he wants or needs to do. The bad news is that travel is likely to be greater. Where’s the art in that statement? It’s in weaving together three independent strands of activity – objective analysis. and stimulating beneficial change in the client organization. The Art of Consulting The art of strategy consulting – I can't speak for the other segments – is expressed in developing workable recommendations.Inside The Minds To highlight a different dimension. People must be comfortable working on a variety of issues in multiple industries.S. They have the opportunity to work with the same people over and over again.

Even then. managing change in the organization.Leading Consultants finally. But the real art of consulting is to bring the three strands together in the most difficult situations – in the situations where the consultant can add the most value. but not really relevant for this client? “Implementability” of the recommendations matters from the outset. Do key client executives share the view emerging from the analysis? Why not? Does the difference in view really affect the recommendations. or not? What other analysis can we do to demonstrate which view is right? What will be the obstacles to implementation? How can the recommendations be reshaped to increase the likelihood of successful implementation? Which clients might be “zealots” who will lead the implementation of the recommendations? What are their concerns? Continually juggling analysis. and change is a challenge at the best of times. Although an engagement might start with a broad set of diagnostic analyses. we once did a 117 . What recommendations might evolve from each possible analysis? Which of the possible recommendations could be powerful enough to justify additional analysis? Are some of the recommendations theoretically interesting. the consultant’s art was in thinking about all three strands in an integrated way. For example. consultants quickly have to narrow the analysis to the few issues that can make a material difference. recommendations.

How did we know to focus quickly on just one analysis? How did we know which analysis? Why were we confident that by rolling up our sleeves and working through the analysis with the manager. and seeing 118 . I spent 12 hours with that manager. who believed that the business was performing as well as it possibly could. The analysis held up. How could we help the business unit change in the face of adamant opposition from its general manager? In this case. Our analysis quickly pointed to a major improvement opportunity. I often help companies change the rules of the game in their industry. he would change his mind? That’s the art of consulting. It’s exciting work. working side-by-side at his conference table. but who had been required by the corporation to engage a consultant (not an atypical circumstance). We went through every number and answered every one of his questions. one-on-one.Inside The Minds strategy engagement for the head of one of General Electric’s business units – someone who had been in the division for 20 years. But the business unit general manager refused to believe it. we concentrated on what we believed was the one absolutely crucial analysis. refining and refining it until we (and the client’s accounting department) were absolutely sure that it was accurate beyond any possible doubt. the general manager proceeded to drive the rapid implementation of a broad change program that doubled the division’s profit within 18 months. As a strategist. Once convinced.

too. Consulting firms. But ultimately.Leading Consultants my clients change the world is personally rewarding. showing how the world has worked in the past. Despite the industry’s best efforts. too. it’s possible to understand the key levers that might change the rules of the game in the industry. have only a limited ability to judge a potential consultant’s long-term success. Even in strategy firms. By combining analyses and creating powerful models. no one can prove something that no one in an industry has done. until you experience it. none of us has been able to effectively communicate what it’s really like to be a consultant. you can’t really evaluate whether you’d be successful as a consultant. only about 15 percent of the people we hire become partners (in accounting consultancies. Should You Become a Consultant? Should you become a consultant? Consulting is a weird business. Given the limits to analysis. Analysis looks backward. the proportion is much lower). is the art of consulting. We hire only people who we believe have the 119 . But this kind of work demands true artistry. As a result. how can we shape recommendations about what a client might do? How can we help the leaders in the client organization mobilize the company to try something that has never been done? That.

since measurement and reward can’t evolve fast enough. With today’s faster pace of change and greater demands for performance. and motivating people to fulfill the future vision. it doesn’t make much sense for any individual to try to assess his or her long-term success in consulting. corporations defined distinct roles: manager.Inside The Minds potential to prosper in consulting. We make relatively few hiring mistakes. and change agent. most of the people we hire are successful as associates. strategist. 85 percent of our people decide they would be more successful or happier if they pursue a different career. In the past. But the question for most people considering consulting ought to be. people have to trust their leader to recognize and reward the 120 . The most successful managers. A leader has to continually trade off improved performance today with changes to improve for tomorrow. But over the next six or seven years. both in large corporations and in start-ups. are what we call zealots: capable of simultaneously delivering today’s results. “Will becoming a consultant for the next three of four years maximize my career options and employability?” The value proposition of consulting to recruits has been and will continue to be that it is the fast track to corporate senior management. increasing the organization’s competitive advantage tomorrow. the pay is good. Sure. With so much uncertainty. the roles can’t be separated. and the opportunities for growth. excellent.

Leading Consultants

new behaviors that are required. No company has enough zealots. Consulting, especially strategy consulting, is a more attractive career than ever. It’s the ideal place to learn the zealot’s skills. Recent research on learning suggests that it takes about 3,000 hours of practice to become a gifted amateur; 10,000 hours to become a leading professional. Interestingly, the amount of practice required is similar for a wide variety of pursuits, including golf, music, and chess. My hypothesis is that about the same amount of practice is necessary to learn skills in business. In three years, a consultant can attain “gifted amateur” status in strategy and leadership – experience that it would take two or three times as long to acquire in a corporation. Admittedly, the managerial skills of P&L management don’t develop much faster in a consulting firm than in a corporation. Since strategy consultancies are entrepreneurial, five years in a consultancy are sufficient to attain “gifted amateur” skills in management along with a “professional” level of skill in strategy and leadership – the world’s best training for a zealot. Lifestyle is the principal downside to a consulting career. Strategy consulting is unpredictable. We work on the most demanding, urgent problems – problems that clients often wait too long to address. It’s not unusual for a CEO to call and ask for a meeting on Saturday or Sunday, or to ask a
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team to begin immediately. The good news is that the engagements that address the client’s urgent, important issues are the most challenging and rewarding for the consultant. The bad news is that you never know when your client will call and need you immediately. Before I became a consultant, I was a college professor. As a professor, I was home with my kids every night; I coached Little League and soccer. As a consultant, I can’t commit to coaching athletic teams; there’s too much danger a client will call me away, and I won’t be able to fulfill my responsibility. We work hard to help people manage their lifestyle: We limit days away from home; an increasing proportion of our people work part-time (at all levels, including partner); we’ve created some career paths with more predictable hours and travel. But lifestyle continues to be one of the major reasons people leave consulting.

The Most Difficult Part of Consulting At least for me, lifestyle isn’t the most difficult part of consulting. Lifestyle is manageable: Draw and enforce lines; be home for birthdays and anniversaries; don’t come back from vacation; when traveling to interesting places, take your family or significant other and stay over the weekend. In other words, find ways to make the consulting
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lifestyle work for you. Consulting provides a host of unique experiences – take advantage of them. For me, the most difficult part of consulting is delivering tough messages to people in the firm. Since there isn’t one standard career path at Booz·Allen, we have to provide very frank feedback about what’s working and what isn’t, so that people can chart the most productive course for themselves. Most feedback sessions are very positive: Honest, constructive feedback has enormous value to the person receiving it. Even when people are leaving Booz·Allen, our dialogues are almost always very positive. The vast majority of people who leave the firm make a natural transition from consulting to general management, either because of a great offer they can’t refuse or because of a change in their desired work-life balance. That’s a happy event for them and for us; alumni are among our best clients. But it isn’t always easy. The truly painful, but very important, aspect is helping someone understand they would be more successful in a career other than consulting. I learned the importance of this early in my career. One of our smartest recent hires just couldn’t figure out the art of consulting. When I started to encourage him to look at some opportunities outside consulting, he pleaded, “Even if there’s only a one-percent chance that I’ll be successful at Booz·Allen, I want to continue to try.” Although he made significant progress
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during the following year, it was painfully clear that he would be much more successful as a general manager – which turned out to be true. He has become an extremely successful manager in a high-tech business. However, because I didn’t do a good job of counseling, this colleague suffered through an unnecessary year with us and delayed the start of his high-tech career.

The Best Advice for a Consultant My best advice for someone in consulting is “overlap your circles.” Circles? Think of the three elements of the strategy consulting business – clients, team, and intellectual capital – as circles. New consultants assume there is a trade-off among the three circles. After all, there are only 24 hours in the day, and if I spend them all developing clients, then I don’t have time to develop ideas or a team. But that’s wrong. Sure, in theory, a strategy firm could develop all three circles using differentiated roles. “You focus on people development; I’ll bring in clients; and Susie will develop our best ideas.” In practice, no strategy firm differentiates roles in this way. Every consultant needs clients; it’s the essence of consulting. Every consultant needs ideas to find unique answers for our clients. And we all need to develop people as part of the large teams we deploy to tackle our clients’ complex, multifaceted problems.
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In strategy consulting, the same people are strongest in all three circles simultaneously. It’s easy to think it’s just a gift, but when we studied our most successful consultants, we found they behave in a different way than the people who are less successful. They overlap the circles. Each action they took simultaneously contributed to developing clients, ideas, and people. For them, there was no trade-off. For example, most of the ideas we publish are stimulated by our client work. Often, we write articles with clients, deepening our relationships with them. Or we write with our teammates, helping develop their skills. Publications not only cause new clients to call us, but also stimulate the intellectual growth of our people. Offering juniors the chance to assume some of a senior’s responsibilities simultaneously provides a development opportunity for the junior and frees the senior’s time for client or idea development. While working at a client, each team educates the other teams about what they’re doing. It’s a great development opportunity for both the presenters and us in the audience. The discussion stimulates new ideas; because of their broader understanding of the client’s challenges and agenda, each team is able to add more value to their engagement. The same principle of overlapping circles also helps with work-life balance. For example, when my kids were in college, I led Booz·Allen’s recruiting at my kids’ schools. It
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product differentiation. The firm valued the time I spent at the universities. Whenever I feel overwhelmed by all that has to be done. And when I went to the schools to visit my children. unique strategies for clients. getting to know the faculty. But today. With knowledge increasing exponentially. making presentations. Michael Porter argued that companies could pursue one of three generic strategies: low cost. 126 . But I also spent time with my kids. Ideas and Knowledge Throughout this chapter. Ideas and knowledge are the raw material strategy consultants use to craft powerful. Twenty years ago. successful companies innovate – applying knowledge about technology or business models to craft and execute new-totheir-industry strategies. and meeting with students.Inside The Minds was a win-win. But strategy consulting is also about knowledge and ideas. I also made the effort to meet with students or faculty. I've focused on people. inside the firm and at clients. I look for ways to better overlap my circles. or brand. the field for strategy today is far broader than Porter imagined.

We target several major studies each year: some descriptive. With the exception of a handful of Booz·Allen gurus. we systematically look outside our firm for new science – for powerful ideas we can apply. as well as in my current role of Growth Officer. and the new adaptations of our 127 . Internally. experimenting and creating their own rules of thumb where theory is inadequate. to understand what companies are doing or thinking. I’m responsible for Booz·Allen’s creation and use of knowledge. try to make things work. However. we develop rules of thumb based on our own experience or those of other consulting firms. Scientists develop and test powerful new theories. As the firm’s Chief Knowledge Officer. Our business is to help clients be successful. powerful solutions we’ve developed at one client may be applicable to other clients (who aren’t competitors). using theory wherever possible. Consultants. In strategy consulting.Leading Consultants That said. the new. We use new theories created by academics and gurus where they’re powerful. that’s a role academics or a handful of gurus try to play. to create and test new theories. we focus on understanding our clients’ changing needs. in the absence of theory. those studies are only a small part of our knowledge activities. like engineers. it’s important to recognize that consultants are more like engineers than scientists. some large-scale efforts.

strategy consulting is about people helping people. based in New York. Chuck Lucier is a senior vice president of Booz·Allen Hamilton. World class “engineers” – consultants with more than 10.Inside The Minds methodologies and rules of thumb – literally hundreds of improvements and innovations each year.” Better than reading the latest theory is access to the person – whether inside or outside Booz·Allen – who can help adapt or apply the theory to a specific situation. the most important knowledge is “who. Better than a statement of a methodology is the expert who can help adapt it to the client’s issue. Even in ideas. By ensuring that our best expert in an area addresses the most demanding problems. Lucier was selected by Consulting Magazine as one of the 25 Most Influential Consultants. “Knowledge” usually connotes explicit understandings. 128 .000 hours of experience in a class of problems – are central to the competitive advantage of a strategy consulting firm. we simultaneously provide the best possible answer to our client’s problem and enhance the expert’s learning. for strategy consultants. Dr. However. Dr. He has been part of Booz·Allen for more than 19 years. In 2001.

which is sponsored by Booz·Allen. Lucier has served in a variety of leadership positions at Booz·Allen. Dr. In 1995. He is the author or co-author of a book and more than 25 articles. 129 . and an SM in management from the Sloan School at MIT. an MA and Ph. Lucier is Booz·Allen’s chief growth officer. Dr. from the University of Rochester. In addition to his client work. Lucier was an assistant professor at the University of Iowa. responsible for the firm’s marketing and commercialization of intellectual capital. the place to find the best ideas in business. managing partner of the Cleveland office for eight years. Prior to joining Booz·Allen. He holds a BA from Wesleyan University. Dr. including the firm’s first chief knowledge officer. and twice a member of the firm’s board of directors. and appears frequently on speaking platforms.Leading Consultants Dr. leader of the Consumer Products & Retail practice. Lucier launched the award-winning strategy+business magazine. Lucier’s client work focuses on corporate and business unit strategy issues for clients in a variety of industries. Dr.D.

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Leading Consultants THE ART OF CONSULTINGFIGURING OUT HOW TO DO IT RIGHT DIETMAR OSTERMANN A.T. Kearney Chief Executive Officer 131 .

Even if you have clients in the same industry – which would seemingly have the same problems – individual companies invariably are so different in their culture and organization that the process of solving their respective problems is entirely new. and then a new set created by the unprecedented amount of change that has washed over the business world in the last ten years. A second continuing challenge for the profession is the issue of how to recruit.Inside The Minds Challenges for the Management Consulting Profession As I think about the industry today. and you’re called upon to solve countless types of problems. On a day-to-day basis. 132 . most creative consultants out there. develop. I think there are really two sets of challenges – enduring ones that have been part of management consulting since the profession’s infancy. So one of our chief priorities is attracting and retaining the very best people in the field. and motivate talent. I’d be hard pressed to name another profession as challenging as management consulting. So there’s no routine to follow. The only asset any management consulting firm possesses is the people who work there. We’re only as good as our ideas – and that means we need the smartest. You work with many different industries with varied challenges.

The industry has become more mature. in 2000. they need specialized skills – such as expertise in IT or mergers and acquisitions. For example. The United States. management consulting was more like a general practitioner’s medical practice. Years ago. and Spain. with more highly educated and specialized consultants. for example. industry maturation and market penetration varies widely. But that kind of generalist approach has become a thing of the past. where as a percentage of GDP. there was little or no growth in the market in the United States in 2001. management consulting is not as developed as in the United Kingdom or in the United States. Geographically. we enjoyed a 56 percent growth rate in 133 . Each consultant dealt with a variety of clients when they were “hurting” and tried to apply some problemsolving to ease their troubles. perhaps the first is the amount of specialization required. In addition.Leading Consultants As far as new challenges go. Today. those markets have been experiencing significant growth. consultants need deep industry expertise to even be asked to the table. France. Accordingly. This maturing market brings its own set of challenges and opportunities. the United Kingdom. But parts of Europe are a different story – particularly in Italy. and Australia are probably the most saturated consulting markets today – in fact.

In my view. and that creates significant restructuring issues. Traditional business structures in Korea (the conglomeratestyle chaebols) are breaking up.T. Kearney. But China. with all the economic problems Japan is experiencing. Korea offers the most lucrative near-term opportunities for management consultants. Now. As a result. but the resources they are investing in management consulting are still relatively insignificant. though. Japan is the second largest industrial nation. This year in France. Korea. it has been an easier market for the global consulting firms – because it is the most Americanized of all the Asian nations. Japan. Unlike Japan. Korea is a slightly different story. In my opinion. we’re taking action now to seize that opportunity. Korean businesses are hiring consultants left and right. 134 . That’s translated into a 50 percent growth rate for us there. offers the biggest opportunity – not right away. and China offer huge potential. At A. that number will probably be 25 percent to 30 percent. perhaps five to ten years – because it is the world’s most populous market. the business community is opening up and beginning to take advice from outside management consultants – just as the American business community has for 50 years or more. but soon.Inside The Minds Italy. of course. But the biggest growth potential of all is in Asia.

Consultants constantly need to adjust how they go about solving problems. 135 . EDS. A. it’s inseparable from business.Leading Consultants Today’s Technology Overshadowing all of these changes. It’s fundamental and critical. And the very nature of the solutions we provide is changing. That’s why I think the strategic alliance we made with EDS six years ago was a great thing for us. we cannot credibly provide a company strategic or operational consulting unless we understand what the Internet can do for that particular business. of course.T. too. In this regard. therefore. Today. is the complexity of today’s technology. Technology has become an integral part of any business. and it has added new layers of complexity for the consulting profession. There isn’t a business process that hasn’t been touched by the Internet. Indeed. Technology consulting no longer forms some separate category – it has become embedded in every strategy or operational engagement we do. Kearney is well positioned with our parent company. That relationship gives us the capability to understand what the Internet is doing to business processes today. We now have EDS to help our people understand and deploy technology in a way we had not been able to do in the first 70 years of our existence.

They are learning how to measure results more accurately.Inside The Minds Technology has become an integral part of any management consulting engagement. Every single process has changed. 136 . That’s another reason for consolidation – private partnerships cannot finance those arrangements. We already see that today with contingency arrangements. The need for this understanding has become more dramatic over time. Supplychain integration. the fees for service arrangements will be changed to a success fee-based structure. There is no future for management consulting without the ability to understand and implement technology. and we all must understand those changes or risk giving clients the wrong advice. It has also been the major driver of growth in the industry. and we’re seeing the next generation come along now. online procurement. This is going to lead to an industry consolidation for the consulting profession. clients themselves are becoming more experienced in the field of management consulting. e-business strategy – these have formed huge markets in the last ten years. The Internet was a wake up call. I believe in the future. Because of the ease with which information can be gathered through technology.

We learn so much about so many industries in the good times. in growth situations you have to identify different parameters. and develops a solution. We also often have to help clients manage and succeed in turbulent markets. Figuring out how to do it right is the art of what we do – why we’re in the profession. finds the root causes of problems. as well as the down times. but to actually help implement the solution. In the current downturn in the United States economy. analyzes them. In these engagements. There isn’t an industry or a company that can’t make money in any economic environment if they just do it right. project management skills. As the economy gets 137 . we’re all well advised to have adequate capacity or flexibility in the products and services we offer – consulting firms and their clients alike. Obviously.Leading Consultants The Art of Consulting – Techniques for Success It is common in the industry to describe management consultants as merely problem solvers – a management consultant listens to the issues. But that’s not the full story. Often companies don’t hire management consultants simply to solve a problem. and a relentless drive to get the project implemented and finished become critical. people skills. This process is much less mysterious than it might sound.

then we want to show increased profits. That’s a very hands-on. I check my dashboard to see what the status is – and take appropriate action. working side-by-side with our clients. A.T. bottom-line results – that we increased the economic value of a client company. we want our results to be measured by improvements in efficiency and productivity. Every morning when I go to work. Kearney stands for results – and for the quality of the consulting work. Thanks to that.T. downto-earth approach. Kearney is extremely results-oriented and qualityfocused. We recently gave it another boost by putting it on the Internet. A. That’s the essence of brand. most indepth quality system in the consulting world. If the assignment is focused on cost savings. If we’re working on processes. We also pride ourselves on having the broadest. If the assignment is growth-oriented. We want to be known in the executive circles. as consultants who brought tangible. 138 . we want to show that we created new markets or increased share. I have available to me at all times how we are doing on our quality commitments at the 300 largest accounts we are currently serving – based on input from the clients themselves. in the whole company. That’s how we measure success. we learn as consultants to adapt to different situations.Inside The Minds better or worse.

convincing and persuading. and you have to sell and implement your own solutions and your own results. you can’t be too outspoken. This is a people business. you must be able to respond accordingly. First. You are constantly interacting with people on your team and the client’s team. as well as your client’s. of course. the problem-solving piece doesn’t work very well. 139 . You have to constantly be in contact with your team and with your client. You also need to be socially competent. Things change quickly. You need to have a drive. It’s a delicate balance you must achieve to sell your work. The information you get back depends on the quality of the questions you ask. You must be able to move organizations to the next stage. you must be intellectually curious and sharp – otherwise. But while intellectual brilliance is a definite plus.Leading Consultants Consulting Skills You need a particular set of skills to be successful as a consultant. influencing and questioning. You have to have speed and flexibility. Knowing how to read people and get along with them is just as important as your intellectual capacity. a desire to succeed.

Our consultants are highly capable individuals who have both intellectual and social skills. They don’t work an eight-hour day – they usually work 12. we assemble people with the content expertise required to solve it. Consultants are incredibly hard-working. They usually can grasp concepts quickly but also can walk around in an organization. Usually by the time the client has decided to use a consultant. and we always have local representation on our teams. I have always said we start the second shift when the clients go home. 62 percent of our business is outside the United States. we need someone with a background in finance.Inside The Minds It’s also critical for us to populate our teams with experts who know how our client’s particular industry operates. we call on someone who has manufacturing or supply-chain knowledge. After we analyze a problem. Our client’s problems are critical and need to be fixed on a timely basis. We expect a lot of drive from the consultants we hire. they are behind schedule. If the problem is in operations. If it’s a financial problem. It’s not surprising that management consultants are drawn from the top MBA schools because our profession truly requires the best talent in the world.to 16-hour days. making individuals feel comfortable and drawing them out. so they can understand the problem much better. 140 . As a global organization. so we need people with deep domain knowledge.

we wouldn’t be successful if at least 60 percent to 80 percent of our consultants weren’t busy all the time. The Consulting Lifestyle The best advice I have received was from my father in-law. Clients pay well for management consulting services. Limiting access to information usually limits success. chances are you’re not a leader. A good 141 . and if there’s no one there. everyone is busy on assignment. But a client who has an urgent problem is not going to wait three months for us to be able to start an assignment. He said. The number of people available for an engagement can be limited because.” I remember that every day. Since they expect a great deal in return. we hope. “Look behind you. The best advice I can give others is about balancing life and work. Most of the time they want to start yesterday. That’s a critical issue that I don’t foresee ever resolving itself. an accomplished football coach. That’s the advice he gave me. they usually realize that open access to information is necessary for their problems to be adequately addressed.Leading Consultants An effective team is allowed access to information from all over the client company and can be trusted with it. In operating our business.

it needs to take place now. The important thing is not so much quantity but quality. and you’re the obstetrician. you also have to have them in your private life. Again. We are similarly bound in the management consulting profession. it was chic to be this hard-working person who had no private life. and they called on their kids. And they see what they’ve missed. I am the father of four children – from two to eight years old.Inside The Minds management consultant’s time is constantly in demand. the company runs into deep trouble.. When I started consulting 14 years ago. “Who are you? I don’t have time for you. That’s just not the way you go about it. and these hardworking consultants are hurt. I’m meeting friends. and I believe that the smaller amount of time I 142 . Just as you have to have time management skills in your professional life. you can’t suddenly say. If you’re working at the heart of a larger corporation’s problems.m. I like to believe it doesn’t have to be that way. And their kids would say. Call me in two weeks.” In the meantime. “I’m taking two weeks’ vacation now. not two weeks from now. a medical analogy: If a child is born at 4 a. If someone needs a major operation in an emergency.” Suddenly their children have grown. And then those consultants reached the age of 60 or so. you have to be there.

And few consultants have managerial talent. In my case. First. Consultants are usually not necessarily the best managers because they’re the ones who analyze problems and recommend solutions. A History of Leadership I’m not sure I’m qualified to tell you the best way to reach the top of any business. Few managers now have great intellectual. Usually the ones who happen to have both rise fast and achieve management positions. execution. I became 143 . and follow-up. but I adhere to that schedule 85 percent of the time. There are only a few people who have both. But every weekend – unless our firm has a crisis – is entirely free for my family. strategicthinking and problem-solving capabilities. But successfully running a company requires rigorous management style. It’s important to me. You can’t just assume you’re going to be home every night at six. it was simple: I happened to be in the right place at the right time – three times.Leading Consultants spend with my family is more high-quality and intense than many other people spend in longer periods of time with their families. They are two different skill sets. My wife will likely disagree. It just doesn’t happen in this profession.

Kearney. and then into the rest of Asia. to whom I report. CEO. It was a wild vision to grow a company that much in only 14 years.Inside The Minds head of our German office. That’s what EDS needed two-and-a-half years ago.T. head of Europe. Kearney. when A. for that incredible growth. Kearney was a middle-level. then into Japan. has also shown incredible strength in managing EDS. then. Fred stood for that vision. Back then.2 billion. and one year after that. who grew the business from $30 million to $1. He started this endeavor in 1983. I have great respect for my predecessor. Fred Steingraber. He also spearheaded the globalization of the firm – moving first into Europe. Chicago-based manufacturing-consulting outfit. we had $30 million in revenue. Fred opened more offices than anyone else at A. We achieved that vision in 1997. The CEO and chairman of EDS. During his leadership of A. and Fred said we had to be a $1 billion firm by 2000. Dick Brown. The changes Dick has made in processes are rigorous. But supplying that kind of vision is what a CEO must do. three years later. But Fred had a vision for the growth of the management consulting industry. 144 . when he came in.T.T.

For the consultant. Consulting fails if it is not heavily supported – and. you need frequent and heavy interaction to keep the effort on the right track. You each need room to breathe to be successful. ideally. trusting partnership. there’s no such thing as a consultant project. led – by a client team.Leading Consultants Golden Rules for Clients and Consultants I would say there are three golden rules for clients: First. The client is advised to have daily or weekly interactions with their team to remain current and to make appropriate decisions if the consulting assignment takes an unanticipated turn. then you are better advised not to hire consultants in the first place. Second.000. I think there are two key pieces of advice: 145 . and implementation becomes much easier. Consultants have a tremendous amount of push. Third. The consultants drive the project and usually work with the best people in the client organization.000 instead of $600. Every project should be shared. Results are owned by the organization. it’s critical to establish an open. If you micromanage the consultants because you are afraid that they might spend $750. after a consultant is selected.

you have more fun in consulting if you consider it a long-term career instead of a stepping-stone for another career in industry. Kearney. 39. before they understand all the methodologies. Second. the Czech Republic. Wrong choice. was appointed chief executive officer of A. This profession is much more rewarding if you’re in it for the long run. You need to be someone seeking new challenges every day of your life. That’s what this industry is about. but it takes two to five years before they really understand industries. Kearney’s operations in Europe in May 2000. 146 . Dietmar Ostermann. he served as A. the management consulting subsidiary of EDS. If you like things set in stone. Mr. responsible for operations in Austria. in November 2000. be flexible and interested in constant challenge.T. Previously.T. You need to have a bit of experience to be really good at this profession. But the rewards are tremendous. Ostermann was named managing director for A. and before they become really effective.Inside The Minds First. Kearney unit head for Central Europe. He reports directly to EDS chairman and CEO Dick Brown. Ostermann is the fifth – and youngest – CEO and the first European to head A. You can hire the best MBAs possible. Kearney in its 75-year history. Mr.T. don’t go into the profession.T.

Russia. Kearney to double-digit percentage growth in revenue. Poland. Mr. As a consultant. and Switzerland. he was a manufacturing engineer for BMW and a plant analyst for Daimler-Benz. Prague. Mr. Kearney’s largest global automotive and manufacturing accounts. Michigan. Ostermann earned a BS in manufacturing engineering and an MBA from the University of Hamburg and an MS in industrial engineering from the University of Southern California. Kearney in Germany and earlier served as New York-based leader for the firm’s North American automotive industry practice. Mr.T. corporate transformation. his specialties include manufacturing strategy. New York.T. and Argentina.Leading Consultants Germany. as well as in China. and efficiency improvement.T. A Hamburg native. Kearney by EDS.T. Ostermann has served as client officer on several of A.T. Hungary.T. Before joining A. Kearney. following the acquisition of A. and Southfield. Japan. Ostermann joined A. Kearney in 1989 and was elected an officer of the firm in 1995. He has worked for A. he was managing director of A. and served on client engagements throughout Europe and North America. Brazil. first in Germany and later in Central Europe. he led A. As a unit head. Kearney offices in Düsseldorf. product development. Prior to that. 147 .T.

Leading Consultants

THE DISCIPLINE OF CLIENT VALUE LUTHER J. NUSSBAUM
First Consulting Group
Chairman and Chief Executive Officer

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The Exciting Side of Consulting As with most people who’ve been in business a while, my career has taken me through several business environments. I’ve been an executive with Cummins Engine, senior VP for marketing and operations with Businessland, and COO at Ashton-Tate, all great jobs, working with great people. But things changed in an important way when I took the job as CEO of Evernet Systems, a national systems integration company. It was at Evernet that I got into the IT services field, which became my door to consulting, a business that I love and that I find ideally suited to my abilities and temperament. I have a lot of energy, a lot of curiosity, and a high degree of self-discipline, a personality that the consulting field seems to particularly reward. Several things get me excited about consulting. One is the diversity of assignments. It’s never boring, never the same. You work with high-intellect people, so you’re surrounded by people who challenge your thinking and your environment. I’ve encountered and worked with an immense variety of people, and we have learned from and taught each other. When smart, committed people challenge your thinking, you have to go through your logic very carefully, and you invariably wind up with a better answer. And, although this kind of supercharged environment can be pretty stressful, I can’t think of a day that I’ve gone home without learning something new –
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something that makes me think about things a little differently. In the sort of consulting that we do at FCG, there is the potential for having a long-term impact, not just on individual clients, but on two important industries, healthcare and the life sciences. This is a major motivator for me, as it is for most of FCG’s employees – we call them associates – because these industries deal with, literally, life-and-death issues. Healthcare in the United States has a lot of problems, and industry leaders are looking hard for ways to solve them. To be a part of these solutions is very energizing because there’s strong, shared moral commitment. From a pure business point of view, the competition is exciting. I’m a pretty aggressive competitor, and, as FCG has grown and moved into IT services, as well as consulting, we have begun to compete against the major players in the industry – Cap Gemini Ernst and Young, IBM, Accenture, CSC, and so on. To compete and win against companies of their stature is a real victory; I enjoy it and know our associates do, too. In a sense, consulting is the ideal business relationship: We don’t succeed unless our clients do. So much flows from this – the teamwork, the sense of a shared fate, the shared

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pride in accomplishments. You find out what’s actually possible with your clients, your colleagues, and yourself.

The More Things Change . . . Although business, like any other human activity, is progressive in the sense that each generation builds on the accomplishments of the last, this progress can be viewed, I believe, as the upward trend line of a series of cycles. This is certainly true in consulting, where the more things change, the more they remain the same. I’ve been in it too long to think things have really changed. You go through cycles and revolutions, and it’s mainly the people who haven’t been through the full set of cycles who think anything is new and unprecedented. First Consulting Group is in information technology consulting and services, which has experienced a series of long waves over the last three or four decades. In each case, a new technology arrives and disrupts existing business patterns, which then resolve themselves into new patterns, in periods ranging from a year or two to decades. Depending on the technology, the effect can be deep or shallow – the mainframe computer, and then the personal computer, have wrought profound changes over the years; other technologies have had a more localized effect. Most recently, we’ve just gone through the first phase of the dot152

healthcare and life sciences are going through cycles of their own. technology cycles by helping them understand these cycles. getting healthy. in effect. always-present network. and part of that is that. and regulatory forces by adopting information technology and changed processes on a broader scale. Similar forces. IT consultants and service providers help clients deal with. To a great extent. but we’re on the other side of that now. scientific. At the same time. The objective is similar to that in military strategy – to keep them from re153 . we have entered the consolidation period. so to speak. We are. driven by wireless and miniaturization. information technology is being absorbed quite deeply by an industry that has historically lagged behind other industries in the United States in that regard. and are awaiting the next phase of the dot-com wave and the next technology in combination. are changing the life sciences industry. seeing the separate evolutionary cycles of technology and healthcare begin to converge. though driven more by industry consolidation and new discoveries in basic science. as it has been absorbed by business. Healthcare is. when things slow down a bit. for the first time. Healthcare is responding to a combination of economic.Leading Consultants com wave. and I believe that the outcome will be major changes in the way care is delivered. which we believe will be the always-on. and profit from. Healthcare has had a very tough two or three years.

they can’t get the results on their own. with its delivery of applications to the individual user. The PC wave. the issue for us is how to show prospective clients that we can achieve the goals and then get it done.Inside The Minds fighting the last war. While these industries have different business models – healthcare is primarily services. the fundamental question is how to organize the firm and approach the work. we concentrate specifically on two industries. 154 . and the Internet and wireless will support radically new applications and offer still different options. in turn. healthcare and life sciences. ultimately. The buying decision for them is how they are most likely to get the results they want. Selling and Delivering Value to Our Clients At one level. the best definition of the value that leading consulting firms bring to their clients is the most common: getting results. and we’re there because the client is aware that. offered very different options from the mainframe wave. which becomes a matter of evaluating how potential consultants work. They’re buying results. because. for any of a number of reasons. while life sciences is research. our clients aren’t buying consulting hours or advice or reports or implementations. For the consultant. First and foremost for us. We and our clients have the same goals.

we sell it. here we are able to cite some pretty impressive references. We lay out the specifics we can deliver. we want to be sure they understand the FCG brand. most people will have an awareness of the FCG brand. so when we walk in. First. It’s just a matter of presenting our unquestioned ability to achieve the results that the client is looking for. Beyond that. which helps enormously. Within this space. the FCG brand is very well known and understood. if not. and distribution – the needs they serve are closely related. and we regard them as a single industry. 155 . we want to confirm the FCG brand in their space. Our greatest strength in that regard is FCG’s long track record of client satisfaction – we regularly score at the top in independent client satisfaction surveys.Leading Consultants manufacturing. Then we explain the team we’re going to bring to the client and the depth of knowledge and experience that team will bring. depending on the kind of client – an academic medical center or a pharmaceutical company or a biotech company or a health-plan payer – as our initial way of engaging with the prospective client. based on “exceeds expectations” performances and carefully nurtured through long-term client relationships. We have deep domain knowledge and very deep technology knowledge. and then we want to deal with the qualifications we have or the kinds of projects we’ve done in their space.

at the same time. So you bring in consultants to provide an outside view and to challenge your thinking. as credible. and objectives but. problems. In fact. you become convinced that you know what you’re talking about. A consultant from the outside is seen. and you talk to the same people day after day. and you stop looking for new ideas. configuring your software or setting up your internal processes that. at least provisionally. both successfully and unsuccessfully. you’d have done differently. for instance. We bring discipline. if you’d known about them beforehand. our position is somewhat paradoxical: We bring deep knowledge of the client’s business. People want solid and empathetic knowledge of their circumstances. even though it may sound conceptually neat. We bring knowledge of what’s been done before. one of the challenges for 156 .Inside The Minds Like many other aspects of consulting. that show that people have tried something that just doesn’t work. We bring detailed knowledge to systems implementations. People often have a hard time accepting new ideas from people they work with closely or frequently. We can bring five cases. If you’re a client organization. There are usually three or four things about. say. detached perspective. a perspective that is external to their business and suspends the conventional wisdom. but an outside view. We can bring that key knowledge. an external.

which can cost us some of the “outside” aura. and go home. so we’re effective from the moment we hit the door. Knowledge management is very important to us for several reasons. This not only avoids the obvious costs and disruptions associated with workforce churning. our Knowledge-Information157 . but it also avoids the hidden costs of having to bring people up to speed on a new project in a new environment. we’ve done most of anything we work on before. They can just hire us to come in. We constantly look at the market and the technologies we work with and turn that knowledge into deeper insight and improved techniques. We have developed a large base of standardized tools and techniques that we apply where a custom approach is not required or is not cost-effective for the client.Leading Consultants us is that when we get into really long-term engagements. send the bill. First. Although every project is a little different. People can gear up for a project without having to bring people onto their payroll and then having to lay them off after the project is over. we have to avoid becoming too closely identified with the client. get the results. We bring variable cost resources. based in Boston. it allows us to reduce the cost of our services. These reside in KITE. We bring focused and applied research capability through our Emerging Practices group.

Inside The Minds Technology Exchange. process designs have to reflect how the client wants to deliver care or do business. KITE is a huge. and techniques that “operationalizes” our approach to knowledge: Take from what has been done before. which we call First Steps. in most projects. it’s perhaps most useful to see standardized tools as literally that: We can help the client build a lot of different houses. are the discipline structures we can take clients through and get much better results as a product of our experience. This tactic is classic short-term thinking that results in a lot of resentment. Standardized tools are. there will be components that require some customization. highly organized and accessible collection of electronic documents. not adequate for every phase of every project. Our core knowledge base and our core set of methodologies. and in a nearly all large ones. So. but we don’t re-invent the hammer for each job. they are constantly being updated. Consultants are often accused of hoarding knowledge to make themselves indispensable and prolong engagements. of course. Project plans have to be adapted to fit client capabilities. add value to it. Good knowledge management also supports an important source of client value: knowledge transfer. Since the contents of KITE are constantly circulating through projects. and put it back for others to use. Our approach is the opposite: We transfer 158 . tools.

this value must be evident to the client. and wise clients demand and respect it. to tell a client what you think the client wants to hear. most clients can spot self-serving language from consultants very 159 . It’s easy. but we must also communicate constantly: The client has to be aware of the value. and leaving a satisfied client in the rear-view mirror. to support the relationship. First. Candor is essential to all enduring client relationships. which is one of the reasons we must not only perform. in the short term. meeting – if possible. Of course. The Ideal Client Relationship The ideal client relationship is one that has developed over the long term and that is based on value delivered. you may well be wrong. the client may have something very different in mind. The first foundation of this relationship is the value that we add to the client – the results that we help the client achieve. but it’s a tactic that defeats both sides. Second.Leading Consultants knowledge to the client to ensure that the client is selfsustaining when we leave. Each of these aspects of our practice is aimed at getting results. and trust. exceeding – client expectations. candor. Good consultants offer it.

you’ve lost your credibility. if the client is wrong. enhance the client’s value. trust is an ethical matter: Do these consultants have my best interests as a client at heart. we respect that. and the trust extended to us as the work goes on is roughly proportional to how many of our promises we’ve been able to keep. At FCG. This is reflected in a lot of specific business practices. The final decision. naturally. Trust. even if you get away with it. it’s a practical matter. you will have cheated the client of one of the highest values a consultant can bring – honest and independent judgment. the consultant will have been an accomplice in failure. as every consultant knows. we fix it. we value candor so highly that our associates are formally evaluated on their willingness to say what they truly think. partly. At FCG.Inside The Minds quickly. or are they merely here for the fees? This is where the client encounters not so much the consultants’ practical ability as their culture. Partly. even if the client isn’t aware of 160 . and no one is ever sanctioned for it – ever. we have developed a pretty rigid code of behavior: The client comes first. of course. We will go the extra mile to meet the client’s needs. is hard to win and easy to lose. But. And. but we have an obligation to the client to help inform and guide that decision in the very best way we can. is always the clients’ and. if we make a mistake. when they do. Third. as we were engaged to do? This is pretty much evident. a matter of confidence: Did we or did we not produce the results.

Others believe pioneers get arrows. and it’s the only business that’s sustainable over the long term. can hurt us in the short run. For example. we helped create. they want to see something that’s been demonstrated at 15 other sites before they implement it.Leading Consultants it. not according to our revenue targets. but for whom we do only occasional work. If you get a flavor of some of those client characteristics. maintaining close relationships is a matter of continuing contact at multiple levels for whatever purposes are appropriate. the better we understand their business and their culture. First. it makes us more effective: The longer we have a relationship with a client. the 161 . We like to stay with clients long-term for a couple of reasons. We staff and manage work according to the client’s needs. it reduces our cost of sales and administration. but the short run isn’t what we’re interested in because we take a very long view of our business and of our client relationships. Second. For us. A good example is risk preference: Some clients are innovators and want to be on the leading edge. it’s good business. It’s important to point out that a continuing relationship definitely does not imply non-stop consulting. This. and now participate in. We have clients to whom we have been close for years. you can do so much more for the client. obviously. they believe pioneers get great land. obviously. Ethical business isn’t just right.

preferences. with all sorts of politics and people and their 162 . You have to get away from expecting idealized implementations. how the political chemistry of the organization will affect the longterm success of what we’re doing. and gain valuable market insights in return. You’re working in a real. On the first project we do for a client. especially with a major client or a highly complex organization. we can typically bring a project off successfully. as well as make FCG available for IT services and consulting work to the members. on that basis. and so on. a non-profit association of leading integrated-care delivery organizations.Inside The Minds Scottsdale Institute. to gain the depth of understanding that will allow us to anticipate how the client will react. human organization. and so on. provide knowledge and expertise. where there are multiple business constituencies and stakeholders that have to be brought on board. And. we get to a level-one understanding relatively quickly: expressed needs. But it can take longer. hospital clinical transformation work – which is highly sensitive to physician and nursing attitudes – and extensive business process improvement work in HMOs and other insurers. We work with the Institute on research projects. This is especially true with large-scale system implementations. Longer-term relationships also improve our effectiveness.

and some careful probing – we’re back now to candor and independent perspective – will uncover the difference. can be anticipated. You have to make sure your project socializes with that culture. Client success is about their relationship to expectations.Leading Consultants intricate interrelations. The first key to heading off problems is to make sure you understand what it is the client really wants – not what the client says they want. Certainly. of course – it begins with the sales call. good planning and management can reduce the likelihood and size of problems. and I believe that more consultants and more projects are undone by creating 163 . is going to run into an occasional snag. no matter how well planned or managed. Getting this right is necessary for setting expectations with the client. such as staffing issues. delays. but I’ve always placed a lot of importance on being ready for them when they happen. or third-party failures. which is a critical part of every project. often cannot. Sometimes they’re not the same things. Setting and managing expectations doesn’t begin with project planning. Others. without exception. Some problems. or disagreements. such as client business problems. Facing Difficult Issues Any project. unplanned project staff turnover.

and communicate. If there’s bad news. the chemistry may not be right. Moreover. They conclude you’re not in control and have not been doing a good job. Three months into a one-year project. we manage expectations throughout the project. but it’s almost invariably suicidal. “OK. especially with smaller firms. not just at the beginning. not when all the options have run out. 164 . is a rule that applies internally on the project team. I understand. There are several kinds of these. In some cases. You simply can’t over-communicate. as well: A good project manager wants to hear bad news when there’s still time to do something about the problem. by the way. you’re a lot safer telling the client about it than hiding it and praying for a miracle. communicate. if we see the project is not going to be completed at the end of the year. the client says.Inside The Minds unrealistic expectations at this point than by almost any other mistake. and we tell the client it’s going to take 15 months instead of 12. Our approach at FCG is just the opposite: We under-promise and over-deliver. The urge to over-promise to get the job and then figure out how to do it later is strong. Managing expectations is really part of another firm principle of mine: Communicate. Another problem that can be anticipated is staffing conflicts and turnover. This. when that happens.” But they’re not very happy if you wait until the 11th month to tell them you’re going to tack on another three months.

Some problems. consulting firms. a failed one usually can’t. You’ll have to try to manage through those issues and. But you need to maintain the resources and the sense of continuity with a client. to list all the things that can go wrong. delay. it’s a matter of formulating the right project plan. ours included. Every successful project plan includes foresight for contingencies. A delayed or cancelled project can usually be revived. Others are severe.” It’s impossible. or even cancel the project. are tempted from time to time to pull a person off a project because there’s another one where that person is really needed. high-severity ones. of course. but not very severe because they can be managed through. such as a major business disruption or business failure at the client. it’s probably a good idea to redesign. In other cases. The unlikely. set appropriate expectations. but I plan along two dimensions – likelihood and severity. are likely. If there are more project risks than it appears we can manage along with the client. with a project. After that.Leading Consultants we simply swap the consultant out. but not very likely. get a lot of attention. “the unexpected. the likely. and with the project plan. low-severity contingencies get some attention. Plans that require too many innovations can pose problems. such as illness on the project team. as always. such as vendor software delivered late or full of bugs. 165 .

You get the conventional wisdom. And then you ignore it. You talk to a lot of people. depending on what our clients want from projects and from us.Inside The Minds Measuring Success for Our Clients Client success can be measured in different ways. what we want is client satisfaction. and we’ll go a long way to achieve it. 166 . that’s the ultimate measure of success from our perspective. we want people to say that we met them. if we can do a few things that are really significant and meaningful. Regardless of what their expectations were. and everybody understands it. We’re looking for high-impact undertakings. By the time it’s conventional wisdom. The closer we get to a result that is related to the top five factors our client believes are strategic to their success – not tactical – the better we like it. I read a lot and look for opportunities. it’s too far into the trend to be meaningful to you anymore. I believe we’ll make our way very well. We know then we’re going to have more meaningful impact. If our clients perform better in their marketplaces than our non-clients. But fundamentally. Determining FCG’s Direction Creating a vision for your organization and deciding its direction are not terribly complex.

” and the clients responded. “Will you help us write the contract?” And when we did that. A year-and-a-half or two years ago. “Well. second. management. We started out doing IT strategy work for clients.Leading Consultants Setting direction is a matter of integrating two tactics into a single strategy. This progression was reinforced by our learning early on that clients tend to prefer consultants who can take them through the entire systems cycle. what patient accounting system?” So we helped make the selection. we got into outsourcing – the other side of things – because our clients said. sitting down with them and looking over their next three to five years to see what systems they needed. and operation. These are. We’re 21 years old now. So we just keep going and migrating and moving and evolving. leading it. and we’ve extended our capabilities along that cycle as we’ve 167 . first. “Can you help us run what you’ve helped us assemble here?” We got into infrastructure work because when we did implementations. following the market and. We once said. we broke the infrastructure. That led us to get into selection. they said. from planning to selection. “You need a patient accounting system. “Can you help us implement it?” Some of what you do just evolves from your relationship with the clients – it’s just a natural migration. implementation. Then the clients said.

while trying to shape reality just a bit by working for industry segment leaders. consultants are expected to be leaders. and we have tried to identify those areas where new technology and new applications offer a real promise for substantial improvements in our clients’ operations. At the same time. in fact. this is easier with some technologies and market segments than others. however. Of course. the “early adopters. are culturally conservative and risk-averse and have historically been skeptical about getting very far out on the technology curve. and that computer-based physician order entry would catch on as soon as it got easier to use. Physicians are a tough sell if they don’t see clear and immediate value for their patients and practices. Our approach has been to create market hypotheses and test them constantly against reality.” where new ideas and technologies that can get a hearing have the best chance of success. for example. We thought the computer-based patient record would penetrate healthcare much more rapidly than it has. Of course.Inside The Minds identified opportunities and built the firm. for example. it’s turned out that adoption of these applications is being 168 . we have occasionally backed the wrong horse – being wrong once in a while is the price of trying to stay in front. Hospitals. But the lesson is clear: Let client needs guide you so you don’t get too far ahead of the market by offering services no one wants – at least not yet.

very few risks can be allayed with the information available within the time horizon for the decision. since high risk and high reward tend to go together. our biggest disappointments have been taking significant risks to do things that had a very small impact on our clients or on the firm. Historically. to me. For us. made with as much information as it’s practical to get. and it’s a factor in every strategic decision. it’s a matter of taking higher risks for greater rewards.Leading Consultants driven much more by regulatory and quality-of-care concerns than by the applications’ intrinsic appeal. Risk-taking is not gambling. and will always seek. and which ones to take. We have built and launched 169 . The lesson. the leadership position. At some point. And FCG has always sought. I have to accept the residual risk or resign the game. it’s the careful calculation of potential for gain and loss. Part of FCG’s growth and evolution has been learning how to take risks in the context of the services we offer and markets we serve. Note that I didn’t say “possible” to get. is clear: Part of leadership is being willing to take sensible risks. I’ve found. Strategic Risks Worth Taking Risk is part of any business venture.

The first is how likely a given risk is and how grave the potential consequences. the second is what you do if things go the wrong way. We’re still trying to dramatically improve our performance in assessing risk. have to live with theirs: disappointment. like other business people. financial loss. if you start trying to play defensive. the risks are digestible with where we are financially and where the business cycle is. while there are many things you want to avoid. small-risk. small-reward. only to find that there was less demand than we thought there would be. for example. though. We’re continuously trying to define our practice around big-risk. At the same time. and painful staff reductions. There are two “faces” of strategic risk decisions. “pure” risk – the consequences of things that we could not reasonably have foreseen. We try to make sure that. then you’re not very effective. Sometimes we were guilty of not having read the market or our own capabilities clearly enough. or that they did not accomplish for the client what we expected them to. in other cases. We’re oriented to walk into the 170 . The latter is. of course. in our portfolio. big-reward. Unlike the old joke about doctors – that they can bury their mistakes – consultants. The history of American business is littered with the failures of companies that developed a fatal resistance to risk. the market changed or other events intervened.Inside The Minds new services.

one risk we’ll take when we identify a solid opportunity in a fast-evolving new market is an acquisition. On the other hand.Leading Consultants client’s office with a list of what we want to do. what we want to accomplish. Since it can take several years to do a good job of building a new. carefully defined projects in a new market. manufacturing. and distribution. we think. We’ve learned from past forays – for example. and avoid making major resource commitments until we’re sure that this is a market we belong in. subject them to rigorous evaluation as we go. We try not to think of the negative – the things we ought to avoid. This is what we did 171 . into healthcare delivery consulting in Europe. It’s like standing on the tee with water in front of you and saying. the only practical way to field a good team fast is to buy one. What makes more sense. We just really avoid thinking in those terms. One area in which we are calculating risk carefully is in extending our services into non-health-related markets. “I don’t want to hit it in the water!” And the last thought you have is exactly where the ball goes. The logic here is simple. where we lost a lot of money on what seemed like a good idea – that it’s too risky to build a large and expensive delivery capability in advance of knowing whether we can serve a new market effectively. is to undertake small. specialized practice from scratch. such as financial services.

by constraining salaries and benefits. ISCG was a first-rate technical services firm with a large pharmaceutical and life sciences client base and an entrepreneurial. in addition to our associates and to our 172 . Clients stretch out projects. informal culture like FCG’s. which is about 40 percent of our business. Although it took a little time to work out the organization. It was our first acquisition after going public. Reduced revenues intensify competition and. Notoriously. is pretty profitable and stable. and it almost doubled FCG in size overnight. healthcare works with much smaller operating margins and has gone though several tough years as government and employers struggle to hold down healthcare expenditures. We’re a public firm. so we have a fiduciary responsibility to shareholders. as a result.Inside The Minds when we at FCG grasped the extent to which healthcare was becoming drug-based and. make it harder to retain good people. it has been a great success. Managing in a Turbulent Market The consulting market can be quite turbulent. even modest economic downturns in markets we serve can result in much deeper downturns in consulting. Although the pharmaceutical and life sciences market. or eliminate them altogether. acquired Integrated Systems Consulting Group in 1998. downsize them.

and delay all but absolutely essential capital spending. When we’ve had to cut discretionary expenses or reduce staff. and to figure out how your business is going to grow profitably. If you try to hide the pain. Now. we’ve been honest about it. It’s important to communicate your actions to everyone in the firm. Level 2 is profitability-oriented. a sixmonth or nine-month period. you drop down in the hierarchy. you have to become expansionist. Level 3 is growth. so you can manage your cash flow through the down cycle. Then when you’re in a time of growth-and173 . spend more energy on collecting receivables. or you might have to drop further down to focus on cash preservation. say. But as the market turns up again. and here are all the appropriate things to do. to begin taking risks again. Level 1. You manage through the turbulent times and communicate to your organization that you’re in a tight cash-flow condition now. You begin to focus on profitability. on the other side. your people find out anyway. When you go from an up cycle into turbulent times. and you lose their trust.and profitability-oriented. is cash-oriented. and revenues fall. to build staff and capabilities. you have to be adept enough to stop dwelling on the things that helped you preserve your space through. You have to get the resources aligned with the demand. at the bottom.Leading Consultants clients. Our way of managing in turbulent times is to “tier” our response with a three-level hierarchy.

Inside The Minds profitability. This is. We had to take some fairly stringent measures to manage cash. as the healthcare industry went though a period of severe revenue constraints and rising costs. including pruning lowdemand services and laying off some people – something we go to great lengths to avoid.” so to speak. Your associates need to understand you’re not just running from one side of the boat to the other. essentially. The important thing is to recognize when you have to “downshift. None of it was fun. but it was necessary to preserve the base that we’re now expanding from again. and that side of our business got hit pretty hard. what FCG has done over the last couple of years. there are other appropriate things to do. what you’re doing is an inevitable response to a cycle through turbulent times. which is the most common response – and one with which I can humanly sympathize – only compounds the problem. and do it promptly. Delaying and hoping for the best. 174 . What might have been minimal downsizing and reductions through attrition winds up being massive layoffs that not only hurt those who are laid off but also leave morale and productivity problems in their wake and leave investors dubious about your credibility.

and in bad times it’s not. With acquisitions. If times are difficult. cost is always the common denominator. Consultants are a good investment whenever an organization has to confront change. the old saying applies: “The time to raise money is when you don’t need it. as well. in good times the change is welcome by the client. A good consulting firm develops the skills and industry perspective to help the client manage under either scenario.Leading Consultants Finding Opportunities in Turbulent Markets In turbulent times. then your clients are probably going toward cash. you can buy companies during the down cycle because they’re far less 175 . you’ll be in great shape. The odd thing is that they’re often wrong. consulting firms have revenue problems because their clients are having revenue problems. In difficult times. and cutting expenses. but it happens anyway. and you’re going toward cash. They might have been focused on their growth and profitability six months ago. So you can provide services that meld immediately with what they’re doing. but now they’re saying the only projects they’ll consider are those that will help reduce their costs or improve their cash flow. If you can respond to those immediate needs.” If you were able to put together a war chest during the up cycle. The clients think they can’t afford the consultants and either fire them or don’t hire them.

and your business unit team. at FCG each person is typically a member of several different teams. you might be a member of your client team. so to speak. where virtually everything of importance is accomplished through groups whose leadership identifies objectives and manages towards them. your currency. your stock price. The ability to work successfully in this environment is a key factor in recruiting. your practice team. so the acquisition isn’t any less expensive than it was before. Being Successful as a Consultant at FCG FCG is a goal-driven company at every level. At any point. Every activity in the firm is directed to specific objectives and reviewed periodically for effectiveness. we have a highly collegial. If it isn’t hitting its objectives. At the same time. If you don’t have a treasure chest of cash. we change the process or reconsider the goals. and your shareholders are not amenable to your paying very high dollar amounts when they think the share price is depressed. team-oriented culture.Inside The Minds expensive then. Relative to setting goals for individuals. has now dropped. and then you 176 . No matter what the exchange rate between the two companies is or how attractive it might look conceptually. acquisitions are really hard to sell. at that time.

We set up six “silos. co-leading it with an individual who’d been around a while.” Each of these is a set of skills or abilities on which every associate is formally evaluated every year: 177 . We have about 2. and it works pretty well. Getting clear goals at the individual level. It’s highly complex in terms of what we’re envisioning and the measurement systems that are required. and we want a report of the progress of the individual and a report of the progress of the team. ill-defined. linking them to the goals of the various teams of which the individual is a part. Shortly after joining FCG. we’ll get 50 percent better performance than if we leave it fuzzy. and concisely to people what we want. and then linking the goals of all those teams to the purpose of the firm – all that is complex but critical.Leading Consultants might be on a task force relative to changing something within the firm. Our fundamental belief is that. if we can describe easily. and unclear. so we want individual contributions to the team. carefully. So goals are extremely important. We redesigned the whole professional compensation and development system for the firm. Each of those teams has a set of goals. I got involved in a human resources task force. but we’ve managed to build it as a set of routines and systems. articulating what we wanted in consulting.000 people in the firm.

another will see the same ten facts and make a much higher-quality decision. This doesn’t seem to be very teachable. your team. often it’s a combination. commitment to quality. achievement orientation. These “silos” are complemented by a set of core values on which we also evaluate our associates. it seems to be innate. and handle complex meetings dealing with conflicts and all sorts of issues. These include accountability. Practice and relationship development skills: Consulting ultimately revolves around being able to sell yourself. and some can be technology. integrity. given the same set of facts. Some people are just better at making higher-quality decisions than others. 178 . and teams of other people to your clients.Inside The Minds Foundation skills: You must be able to write well. Leadership abilities: We need this leverage to drive the business. Technical skills: Some of these can involve industry domain knowledge. Decision-making ability: Some people can see ten facts and make one type of decision. speak well. Project management skills: You have to be able to manage projects in an extremely disciplined way. adaptability – all things we work to embed in the firm’s culture by hiring and promoting in accordance with them.

but once you establish what you’re trying to accomplish on deadlines. Creativity is often needed in the early part of the project. great leaders really have to get 179 . a strong sense of presence. a variety of intangible skills. the ability to communicate effectively. so that the project can be successful in meeting their needs. to get all the alternatives voiced and understood – but then to be decisive about setting direction and leading the consultants to make it happen. have strong egos. so you can really get the discipline established that will carry your project through. So for a team. all those skills come together – not just the technical skills. you have to set up some level of command-and-control. by their very nature. and probe more deeply to understand more about how the client’s business is put together. Consultants. and you need very good leadership to make sure every one is heard – to call them out. but also the ability to perceive and read people well. you’re looking for technical skills.Leading Consultants Successful Teamwork and Team Leadership For successful teamwork at FCG. discipline. and strong views. When you’re responsible for delivering a project. and then team leadership to pull all those disparate people together. A great leader exudes discipline. ask better questions than somebody else does. discipline.

You have to find out what they’re not saying and where the gaps are and sometimes what clients haven’t even recognized. extremely talented people. and I have good instincts. You can’t talk to them and see what’s 180 . very independent. I get frustrated when people ask me about something that has been written. You can’t rely too much on what’s written. You have to be intuitive: If you see 1 + 1. by that time. Leading a consulting firm is like leading a group of lawyers or an educational institution. I’m perceptive. That’s partly about establishing the FCG brand. You also have a group of highly energized. see what’s moving. You have a set of organizational goals that are inherently very complex and require a high level of communication and collaboration. it’s usually too late even to respond. you have to give them purpose beyond their individual accomplishments. It’s important at FCG to have a high purpose.Inside The Minds down to the disciplined. something that’s noble and achievable that is beyond what the individuals could accomplish doing consulting on their own. I think you have to be that way to be able to head up a modern consulting organization like this one. you have to be able to leap to at least 4 or 5 and see the trends. To keep my edge as a leader. command-and-control structure to deliver the final result. and in leading those people. but it’s ultimately about having an impact on the industry we serve.

We provide healthcare not through a nationally uniform system of insurance. driven largely by the growing reliance on 181 . At the same time. you just see the trend and know what’s happening ahead of time. The result is that we have around 45 million Americans with no health insurance. A Look Ahead at Healthcare and the Life Sciences In many ways. But the healthcare industry in the United States is recovering from a period of fairly serious revenue and cost pressures and is facing other difficulties. you’ll get generally good care delivered by excellent. and we lead the world in medical technologies and innovative pharmaceuticals.Leading Consultants happening. dedicated people. This leaves a lot of the population vulnerable. leaving most without a reliable source of medical care. Our physicians are probably the world’s best diagnosticians. our costs are rising steadily. If you get sick in America and have either good private insurance or some form of government coverage. American healthcare is superb. but through a patchwork of government programs and employer-funded coverage. when people are self-employed or when employers are forced to reduce benefits in the face of rising costs. American healthcare has a number of fairly serious longterm problems.

Inside The Minds increasingly sophisticated drugs that turn acute diseases into chronic ones. it cannot solve the underlying structural problems. Our healthcare also has had some fairly serious quality problems. although information technology can help provide some degree of clinical integration. of the Internet: Although the Internet can be of immense help in changing some business processes. The information technology problem is being addressed. This is true. both by the initiatives of individual insurers and care delivery organizations and by employer initiatives such as the Leapfrog Group. The fragmentation problem has much deeper structural roots and. empowering consumers and supporting some kinds of clinical information management. These are largely the result of the fragmentation of care delivery in the United States and our slowness in implementing the information technologies that can prevent the kind of errors that occur in such an incredibly complex. which have been documented by the Institute of Medicine. information-saturated environment. especially as we move into a period of slower economic growth. it can’t overcome the fundamental weaknesses in our healthcare 182 . which extends life spans but increases overall healthcare consumption. as well. which threatens to push more people out of employer-based coverage. The two effects – more expensive drugs and longer-term usage – have a compound effect on costs.

are in their Golden Age.Leading Consultants system that have their roots in national policy decisions or economic forces. a mixture of private and government initiatives. It’s becoming clear that our current approach to healthcare will have to change over the long term. The pharmaceutical and life sciences industries. will allow us to eliminate the trial-and-error prescribing that we’ve been forced to do until now and will aim the drug exactly at the disease. including. I believe. I believe. The drug companies are encountering some consolidation pressures. but with a larger government component. “personal medicines. with discoveries in the basic sciences. What will replace it will probably be the sort of thing Americans prefer. The pharmaceutical industry has absolutely transformed healthcare in my lifetime alone.” based on individuals’ genetically programmed responses to drugs. occurring almost faster than they can be assimilated and applied. and legislative restrictions are being applied to some research directions – note the recent controversy over stem cell research – but I think there are many directions for success. Consumer influence in healthcare will grow steadily. some form of universal insurance coverage. For example. in genetics and biochemistry. and I expect the transformations to continue. again probably combining private and government funding. 183 .

and based on technology. though still 184 . as we are now – from late 2000. I think it’s back to the waves. Fully integrated systems and major implementations tend to drive the market pretty strongly. through 2010. fluid. not an application. We’re much better off when we can ride the big waves of application. I know people are enamored with wireless now. As far as developing hotbeds around technology are concerned. But I see another really strong period from 2002 or 2003. Consulting took a pause and went backward a little. I think that as our society and business institutions become exponentially more complex. for exactly as long as it’s needed – has become so central to the world that continues to evolve.Inside The Minds A Look Ahead for the Consulting Industry I think where the consulting industry is sitting now is similar to where we were around 1990 and 1991. such as CRM or ERP or process re-engineering or the dot-coms. through 2001. the consultant’s stock in trade – the ability to apply highly specialized knowledge and skills combined with an independent perspective. Wireless is a technology – it’s not really a movement. We were between waves then. that consulting is going to have its own golden period again. I think there will be major new areas that will continuously open up. and carrying over a little into 2002. New technologies and their implementation.

When those waves happen. consulting is at its peak. When we’re between those waves.Leading Consultants important. Then you understand truly the implications of making bad decisions. and specialty knowledge. tend to drive the market in a less significant way. we experience a pause – it’s not a white-hot area. It took an awful lot of bad news for 185 . But you just go through waves. People comment now that I probably handle bad news as well as anybody else. some innovations. You can’t really learn about something till you’ve experienced it. My daughter’s long recovery from a near-fatal automobile accident several years ago changed my life dramatically. I think there will be another white-hot wave – we just don’t know when. and we just have the normal sharing of best practices. Best Advice The best advice I ever got was from the school of hard knocks – I’ve learned far more from my mistakes than I’ve ever learned from somebody’s advice or counsel. There have been massive waves of things that make people want to try to understand what other people are doing in common and then take them into their businesses.

is. you won’t be successful. put yourself in the client’s shoes. Now let’s go figure out how to make something positive out of it. She found her husband. Applying the personal to the business. I’ve changed and mellowed.Inside The Minds me to learn you don’t have to get uptight. to the scene of her accident – and let it happen – because so much positive has happened out of the accident. First. not long ago. if she could. It dramatically turned me around. Then take yourself out of those shoes and apply a broad enough perspective to see the client outside of how the client sees himself or herself. be empathetic with the client. You just listen to the news and figure out what to do. If you see things only in the consultant’s broad perspective of what the client “ought” to 186 . My daughter and I were sitting. The Golden Rules of Consulting There are only a couple of fundamental rules. talking. the family has really pulled together. and she said she’d like to go back in time. Fox’s DeLorean from Back to the Future. there’s just so much good that came of it. in Michael J. I can now say that what is. If you can’t be “schizophrenic” and see things both ways.

Mr. and outsourcing to the healthcare. Luther J. after more than a 187 . I’ve often said that it’s only by understanding why they are the way they are that you earn the right to recommend that they change. FCG. Nussbaum is chairman and chief executive officer. He entered the computer industry as senior vice president of marketing and operations of Businessland. a worldwide reseller of personal computer products and services. Prior to Evernet. you won’t understand enough about why they are who they are. That’s probably the most important rule that will serve a consultant.000-member. $240 million public consulting firm. having served most recently as president and chief executive officer of Evernet Systems. a national network systems integration company. Nussbaum was twice named to Computer Reseller News “Top 25 Executives” in the computer industry. systems integration. so you can help them change. Inc. Nussbaum is a 17-year veteran of the computer industry. a 2. providing leadership to First Consulting Group. Mr. Nussbaum was the president and chief operating officer of Ashton Tate. is the leading provider of consulting. a microcomputer software development company..Leading Consultants do. pharmaceutical. and life sciences industries. Inc.. Mr.

Nussbaum received his BA from Rhodes College and his MBA from Stanford University. Mr.Inside The Minds decade in senior management at Cummins Engine Company. the Olson Company and Command Packaging. 188 . He serves on the boards of Emergent Information Technologies and two private entrepreneurial companies.

Leading Consultants GIVING CLIENTS MORE THAN THEY EXPECT BRADLEY M. SMITH Milliman USA Chairman 189 .

The object of the question changes over time. there will always be a need for consultants who can think through solutions to difficult questions. It is exciting to know that. but it also makes consulting very rewarding. This creates many challenges for the consultant. consulting is a pretty simple business. it is not. You have to be an expert in a continually changing environment. Contrary to popular belief. I believe all clients ask one question. I believe the consulting business is changing at a much faster pace than ten or 20 years ago. as the world changes over the course of a career. “What do you think?” “What do you think the reserve should be?” “What do you think the premium rate should be?” “What do you think the pension liability is?” It all comes down to the question.Inside The Minds The Question All Clients Ask Conceptually. “How much is it going to cost?” or “When is the project going to be completed?” although many clients do ask those questions. “What do you think?” There are many implications to that question with respect to being a successful consultant. One implication of the question “What do you think?” is that you have to be an expert in something. The question all clients ask is. Now. when the subject of the question “What do you think?” would stay the same for a longer period of time than it does today. the subject of the question changes 190 .

Leading Consultants constantly. 191 . and potential clientele. Therefore. As a consultant. Six months to two years from now. If you want to be a successful consultant. The second ramification to the question “What do you think?” is that clients have to care what you think. have to know you’re an expert. and your potential clientele need to be aware of your expertise. your responsibility as a consultant is three-pronged: 1) You have to complete your current assignments to the satisfaction of your clients. They are constantly replenishing their knowledge base. consultants have to simultaneously reinvest in their knowledge base to prepare to answer the questions clients will be asking tomorrow. and your clientele. This is one reason that consulting is more challenging. While solving the problems of today. clients are not going to be asking you the same questions they ask today. Some consultants are very insular and inwardthinking. than it was in the past. As a consultant you must be an expert in a given topic. but they are not communicating to anyone that they are an expert in a given topic or area. you have to be an expert in a given set of topics. as well as more rewarding. you have to continually reinvest in your knowledge and experience base to keep these amortizing assets whole.

You have to 192 . you have to constantly re-qualify yourself as an expert in your given marketplace. However. The balance isn’t the same for everybody. Each individual has to find what works for him or her. while making people aware that you have done so. you need to understand what is important to you as an individual. You have to let each consultant find his or her own comfort level.Inside The Minds 2) You have to reinvest in your constantly amortizing knowledge and experience base. Everyone has a different comfort level and is in a different position with respect to his or her life cycle. In short. I believe the true art to a successful consulting career is finding a balance between your personal life and your professional life. You have to recognize that every volleyball game you miss or every gymnastics meet that you can’t make is a missed opportunity that may not come around again. it is clear that being a successful consultant is quite demanding. You cannot and should not impose your values and balance on other individuals. The Art of Consulting – a Delicate Balance Considering all of the requirements. 3) You have to communicate to your clients that you are an expert in the ever changing environment in which you consult. As a consultant.

you know you are successful if. There are times in every consultant’s life when you are stuck somewhere. You have to assign an appropriate level of importance to those personal obligations and opportunities. and there are family events you are going to miss. has confidence in you. and believes you are capable of answering a particular question. they are happy with your work. just as you do to meetings with your clients. There are tradeoffs you will face. If they stop asking questions. and they are willing to schedule around those events. 193 . there is a reasonable chance that you have not completed your assignment successfully. Generally. the client asks you another question or gives you another assignment. then they will continue to seek your counsel. Success When do you know you are successful as a consultant? Generally. The fact is most clients understand that you cannot be available during certain periods of time. or start directing those questions to others. upon completion of a given assignment.Leading Consultants make judgment calls. if they are asking another question. If the client is comfortable with you. Balance is the key to a long-term consulting career.

If they act in a way that is contrary to the advice you have given them. One of the most critical skills needed to be a successful consultant is the ability to listen. You have to allow clients to make their own choices based upon the information they have and the input you give them. When a 194 . you cannot take that disagreement personally. Some of my most loyal clients have been clients who have disagreed with me from time to time. It’s not enough to add value equal to your fee. Or you may be right. These assignments can be the most fulfilling. because they allow the consultant to add substantial value. and they may be wrong. and once told. You have to remember that you are not always right and that clients have the right to be wrong. You have to let them be wrong at times. ten times your fee. you will be asked broader questions with respect to their business. there are times when a client asks a consultant what he or she thinks. As your clients gain confidence in your ability to add value.Inside The Minds Having said that. five. you have to add value well in excess of your fee – three. the client will disagree. As a consultant. you have to add value in multiples of your fees. Many times a client knows he needs help but does not know what question he should ask. you have to accept that they may know more than you about a particular aspect of their decision. If you are going to be a successful consultant.

A consultant who understands the 195 . by participating in industry meetings and on committees is another important component of a successful consulting career. once you identify the questions or issues facing your client. as well as others in your profession. typically will be a successful consultant. Staying in touch with other consultants. but I would not want to risk the growth I have experienced by not writing or speaking. results speak for themselves. that is a priori evidence that he or she is successful. If a consultant keeps his or her existing clients happy and grows his or her client base over the long term. you can then proceed to providing solutions. In the consulting business. Obviously. Consultants have asked me if I think these activities translate into the development of more business. and who can articulate his or her conclusions based upon an understanding of the issues the clients are confronting. A consultant who is willing to listen and not impose his or her will in the first five minutes of a conversation. I typically answer that I don’t know for sure. staying involved contributes to the value you add to your given profession.Leading Consultants client does not know what the question is. I have personally written a number of papers and have spoken at a number of industrywide meetings. even if you can’t be sure it contributes to your commercial success. your ability to listen and abstract from him or her what the issues are can be one of your most valuable contributions. Likewise.

Everyone’s issues are different.Inside The Minds need to listen. You have to have expertise in the topic you are consulting on before you enter into an assignment. Advance preparation is the key. 196 . There are no cookie-cutter solutions anymore. To a great extent. You will tailor-make the answer to the specific company’s issues. You need the basic background ahead of time. The world has become too complicated. the ability to communicate. and the need to reinvest in his or her knowledge base will typically be successful over the long term. This also has implications for the way you perform your job. Your ability to listen and extract those issues is critical to your success as a consultant. They want you to answer 80 percent of the question in 20 percent of the time. but you have to have a very broad knowledge base. If you are not well prepared to answer the question your client is asking before they ask. There are very few times in consulting when you will get to the absolute completion of a project. you will probably not receive the assignment. consulting involves addressing client issues on an 80/20 basis. No Cookie-Cutter Solutions Another ramification of the question “What do you think?” is that you have to think.

but if you can’t communicate to your clients what you think about an issue. Those who are fundamentally sound. in writing and orally. who are capable of blocking and tackling. If you are not fundamentally sound. and ultimately you will not excel. I will admit to a bias. you will not succeed as a consultant. your performance will be flawed. Maintaining strong fundamentals leads to continued success. whether in an athletic endeavor or in your business practices. but they are also one of the most critical skills. There is always somebody who wants to replace you. and I firmly believe that reading everything I can get my hands on has 197 . Communication Is Fundamental The ability to communicate effectively.Leading Consultants I am a firm believer in strong fundamentals. Good communication skills are not only a necessary attribute for a successful consultant. I am a voracious reader. the only thing more difficult than reaching the top is remaining on top. and who are willing to prepare in advance will be the individuals who succeed over the long run. All too often I meet students who are lacking in one or the other of these basic skills. is absolutely necessary if you are to become a firstrate consultant. and then do some more. You have to do all of the things you did to get there. Then. You can be the smartest person.

Reading should make up a large component of any consultant’s time. Consultants may be brought in to do the work that internal staff would have done prior to a downsizing. Reading is a key requisite for keeping your edge. Opportunities Sometimes a down economic environment creates a greater need for consultants. Consultants need to anticipate the questions their clients ask. Read about questions that companies are asking in other countries. and business issues affecting industries you don’t typically consult to that may help you address questions your clients may eventually ask. One way to anticipate questions is to read. environmental. 198 . regulatory. Clients hire consultants when they need them and fire them when they don’t. It helps a consultant gain insight into business as a whole. and a down economy can create opportunities for consultants. There are legislative. Read about industries that are not now the focus of your consulting practice. Reading will also help you improve and refine your communication skills. as well as the particular businesses to which they are consulting.Inside The Minds assisted me greatly in my consulting career. because those are questions that may be asked in the United States. Consulting is a variable cost as opposed to a fixed cost.

your consulting firm) in better shape than when you found it. Milliman USA. just as when your grandfather took a tool off of his workbench. there are a lot of questions faced by clients that consultants can address when business isn’t going well.. The best piece of business advice I ever received was that each Milliman consultant should view the firm as a tool – a tool to be used to add value to your clients and reach your personal and professional goals. whether it is a fixed-fee or a time-and-expense-fee job. and then replaced it. oiled it. used it.e. As a consultant.Leading Consultants Likewise. it hurts all consultants. When consultants in other firms don’t serve their clients well. On any given assignment. when consultants perform well. you have to position yourself to answer questions in both up and down markets. successful firm over a long period of time. you need to leave the tool (i. You should always strive to give the client more than he or she expects. However. the pie gets larger for all consultants. 199 . profitable. sharpened it. then you will clearly have a growing. Likewise. always give the client more than is expected. therefore. If every consultant in your firm takes that kind of ownership and makes that kind of commitment. Best Advice Our firm. is now over 50 years old.

Inside The Minds Firm Structure A firm’s organizational structure. we tend to attract very entrepreneurial and aggressive individuals. We believe our ownership and organizational structure allows us to attract the very best people. The contribution you make in any given period determines your compensation. Our focus is on getting the people who will best address the questions and issues our clients face. However. The consulting firms that succeed in the long run are the ones that attract the highest caliber people. Our assets are our people. Milliman USA is a firm in which we have multiple profit centers. and culture dictate what kind of people will be comfortable and successful there. For instance. Because of this organizational structure. It is not a capital-intensive business. We have consultants who are relatively young who are compensated more than consultants who are older and have been with the firm for a longer period of time. ownership structure. This goes from the equity principals of the firm all the way down through the clerical staff. I believe firms that are owned and operated by their consultants are well 200 . Consulting is a relatively simple business. The profit centers are merely a mechanism for splitting up the pie at the end of the day. they have contributed to the creation of a firm that is the ultimate meritocracy.

Although technology cuts down on the amount of time it takes to complete an assignment. let’s assume you are a consultant considering joining Firm A or Firm B. it has also increased client expectations (sometimes unreasonably) with respect to the amount of time needed to complete a given assignment. I believe the best people will be attracted to Firm A because they will be compensated for their efforts more directly. The Consulting Environment Technology has made consulting easier. attract a disproportionate share of the best people. Consultants who own the firm participate in the ownership return. Firm B has sold the ownership return to external owners. and will participate in the ownership return. whether through a public offering or to another firm. as well as more difficult. as well as the return generated by their consultative efforts. To illustrate.Leading Consultants positioned for the future because they will. is much faster than it used to be. partially because of technology. The pace of consulting. Firm A allows you to extract the ownership return. whereas. 201 . The questions are changing at a faster pace. in the long run. and technology has created higher expectations.

On one extreme. consultants are high-value-added. low-margin items. That does not mean you will work every Saturday and Sunday. They are a high-value-added. you need to understand the requirements of that model. On the other hand. there is Nordstrom. you have to be willing to invest the 202 . which is very successful in the market they serve.m. They are very successful doing what they do best. An analogy exists with retailers. you have Wal-Mart. because that is their business. if a client calls you at 5:30 on Friday afternoon and wants you to complete an assignment and deliver it to them by 8:30 on Monday morning. Likewise.Inside The Minds It is important to understand the market for which you want to consult. high-margin operation. The implications are that. high-margin businesses. It has been said that if you walk into a Nordstrom at 8:55 p. selling high-quantity. or satisfactory completion of an assignment demands it. you need to be willing to work on Saturday and Sunday to complete that project. But when a client asks you to do that. you do not have to work until 10:00 every night.. and you need a pair of shoes. If your consulting firm wants to be a highvalue-added business. five minutes before they close. in the retail marketplace. Typically. they will stay open as long as necessary for you to pick out those shoes. It just means that you have to be willing to work on Saturday and Sunday if that is what is necessary to complete an assignment to your client’s satisfaction. as well as its expectations.

If you are too 203 . But you have to be available when your clients want you. If you understand where you want to be in five or ten years. you need to pass on that opportunity. the short-term tactics seem apparent. five years from now. seven days a week. you are not a high-value-added consultant. ten years from now.Leading Consultants time because. If you don’t think you can add value for a potential client. three years from now. You have to discriminate between those clients for whom you believe you can add value and those for whom you can’t. as well as your firm’s goals. people make mistakes when they over-emphasize short-term goals. we are not going to stay in business very long. Consulting is a client service business. If we do not keep our clients happy. I am not a big fan of short-term goal setting. I think it is more important to focus on long-term goals and address where you want to be as an individual and as a firm. This has ramifications in choosing the clients you work for. and all consultants need to understand that. That doesn't mean you have to work those hours – that is clearly impossible. It is important to understand your goals as an individual consultant. thereby doing something to meet a specific short-term goal that they wouldn't do otherwise. otherwise. You have to make the commitment to be available on short notice 24 hours a day. At times.

in retrospect. The answer you gave as a consultant may have been well thought out and the appropriate answer at a given time. Therefore. The consulting industry is constantly challenged by the litigious society in which we operate. this is not a risk that can be accepted by consulting 204 . or constituted malpractice. it may prove to have not been the right answer.Inside The Minds focused on short-term revenue or growth goals. Industry will continue to reduce fixed staff costs. it may lead to a bad decision with regard to accepting an assignment where you cannot add value. consequently. I think more people are going to enter the consulting field because industry is attempting to lower fixed costs and. management needs to accept the responsibility for what it thinks is appropriate while considering the consultant’s advice. but three to five months later. I believe the consulting industry will grow substantially over the next decade. will reduce staff positions. Ultimately. In fact. That does not mean that the advice given at the time was bad. There must be an understanding or recognition of this fact if consulting is to continue as a viable profession over the long run. transforming them into variable consulting costs. Consultants cannot be the ultimate reinsurer of any particular outcome for their clients. The biggest threat to the consulting industry right now is the rise in litigation. or necessarily was actionable from a legal standpoint.

One of the dangers faced by all consultants is that while they are working on projects. satisfying the current demands of their clients. Once identified. there will have to be a consequential impact on the advice we give to our clients. as they unfold. Maintaining relevance involves the identification of areas in which the skills of the consultant can be utilized to add value in multiples for the client. When momentous events on the world stage alter business as we know it. None of us lives in a vacuum. pension and other employee benefit costs. These include projections of net income and cash flow projections for insurance companies.Leading Consultants firms or a cost that can be transferred economically to the client. You have to recognize and accept what consulting is and what it is not. A substantial core of the business of Milliman USA involves the development of projections. will certainly have an impact on the work we do and the advice we give to our clients. and liabilities for all types of enterprises. World events. as well as demographic projections for governmental entities. the consultant must have or develop the capabilities and do the research that will allow him or her to add value to their clients and potential clients. Maintaining and enhancing our relevance to the markets we serve is the biggest challenge faced by any consultant or professional consulting firm. they do not invest the time or 205 .

and a Fellow of the Life Management Institute (LOMA). next quarter. Mr. next month. 2) Make sure you understand where you as a consultant and your firm want to go in the long run. Bradley M. 3) Maintain balance in your life consistent with what makes you happy. Smith graduated from the University of Illinois in 1977 with highest honors. they lose touch with their marketplace. they do not invest in their knowledge base. a member of the American Academy of Actuaries.Inside The Minds resources necessary to maintain relevance in the future. next year. Specifically. 4) Continuously reinvest in your knowledge and experience base. 5) Most importantly. Smith is a Fellow of the Society of Actuaries. He formerly served on 206 . they fail to do the research necessary to serve their marketplace tomorrow. have fun while you are doing it. recognizing that these are constantly amortizing assets. The Golden Rules of Consulting The golden rules of consulting are: 1) Always give clients more than they expect.

He served as a member of Milliman’s board of directors from May 1996 to May 1999. product pricing. and corporate planning. product development. now known as Milliman USA. Before working at JCPenney Life. He joined Milliman & Robertson. Mr. In May 2000 he was elected to the position of Milliman USA chairman of the board of directors. including insurance industry mergers and acquisitions. Before joining Milliman. in April 1986 to open the life/health practice in Dallas. list segmentation. Smith was vice president and chief actuary at JCPenney Life Insurance Company. where he was heavily involved in direct-response marketing analysis. Smith worked in the product development and the reinsurance departments at Republic National Life. and financial statement preparation. Mr. His practice involves all aspects of life and health insurance..Leading Consultants the Board of Governors of the Society of Actuaries. 207 . Inc.

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SILVERI Drake Beam Morin Chief Executive Officer and President 209 .Leading Consultants TAILORING SOLUTIONS TO MEET CLIENT NEEDS THOMAS J.

Now I’m with Drake Beam Morin. which is something every consultant really does. the world’s leading career transition consulting firm. Everything is grounded in good educational background in theory. You get to deal with the human capital element. I always find that to be the most exciting part of the job. The personal service sector is really what gives me the charge. You’re always dealing with different people. as an organization. If you want to do your job well as a consultant. nor should it be. you’d better like working with people. After Price Waterhouse I spent a decade in the advertising and public relations business in various finance and administrative positions. one needs to have an active listening skill and be able to adapt that book knowledge and knowledge gained from experience. Everything has to be tailored to meet their needs and where they. in one form or another. I started with Price Waterhouse in public accounting – an excellent base on which to learn. for 20 years. The “solution set” for a customer is never really the same. and serve as the company’s president and CEO. and implement it through effective solutions that work for the customers. 210 .Inside The Minds The Art of Consulting I’ve been involved in the industry. you’re always dealing with unique challenges. want to go. but in practice. I’ve always been in the personal services business.

Customers tend to have the feeling that once they’ve turned a problem over. It also requires that you make sure the solution set you provide is in keeping with the organization’s culture.Leading Consultants you’d better like that interface. The art of consulting requires mastering the art of listening to a set of problems that an organization or individuals have. when in fact you’re the facilitator to that solution. Another integral part of the job is that the customers will often look to you as the solution to the problem. and you’d better be a good listener to be able to impart your knowledge in a way that will be accepted by those you’re consulting with. I would urge anyone who wants to get into business today and loves interpersonal interaction to take a look at the consulting sector as a career path. I enjoy it and have stayed in it my whole career. you’ll be able to move the agenda of those you’re working for more quickly and efficiently in the constantly changing world of work. its needs. That’s something we have to manage on the front end. the most important part of active listening is 211 . and developing a rational approach to getting where the organization wants to go. quickly and efficiently assessing where the organization is. If you’re successful in doing that. For me. From our perspective. its directions. that has always been the biggest reward. and its competencies. then the problem is just going to get solved.

And of course. ever over-promise. so we can constantly be moving forward and be at the forefront of whatever is coming next.Inside The Minds understanding the customer’s expectation and managing that early on as it relates to what is possible and what we can deliver – and never. as the leader of a consulting company. 212 . Success for me is the moving forward of that organization’s agenda through the use of our time and our resources. We want to do it in a way that allows for the growth and development of our people and our practice. speaking as a CEO. it means that we have secured a relationship with a customer where we have provided a value-added contribution. Your credibility is on the line. and the investment is on the line. Success for me is repeat business. My best definition of success is repeat customer activity. we want to do that in a way that is profitable. and they want to use us again. so never over-promise and under-deliver. From my perspective in my role as CEO. I define success as being able to have the company execute as many of our recommendations and procedures as possible in a way that ultimately moves their agenda forward. Defining success in consulting depends on the role and whom you’re talking to. and the organization that’s hiring you is on the line.

nor should they. when you have that opportunity after you’ve identified that solution set. we religiously focus on where we have the skill set and match that quickly with industries and solution-set methodologies so we can provide that value-add to the customer. They need to know that you provide a 213 . We’ve spent a lot of time internally describing who we are and who we are not. You want to make sure you know enough about that customer to be able to clearly understand and precisely articulate that solution set early enough in the process. That’s the way to be successful. From our perspective at DBM. Then. At DBM. as we go about the sales process.Leading Consultants Methodologies In general. you’ve identified the competency and skill set you bring. The goal is not to focus on that competency that you can’t provide value-add quickly and efficiently. I do think that matters very much to organizations today. we are constantly using specialists in an attempt to provide a value-add to our customer base and understand enough about that customer base to quickly bring our value-add to the table. talking about the competencies to which we can provide a value-add solution set. No customer wants to pay for your learning. so there’s a degree of comfort. we spend a significant amount of time behind the scenes.

and assess your own skill set first. There are times when we’ll turn down business. and we know what we can’t do. We don’t want to be everything to everybody. If you don’t. We spend a lot of time doing that. Given the nature of our business. you will wallow around in the world of consulting and not be very successful. “We can do this. and we can do that. Customers look for value-add. with your own direction.” I think you’ll immediately “turn off” customers. so that DBM is a truly reliable and trustworthy partner. and by the way. As a consultant you need to sit down with your own strategy. If you can convince yourself and your people you have the “permission” to effectively bring a solution to the marketplace.Inside The Minds value-add immediately to the process. we can handle that as well. or we’ll refer business to others because we know what we can do. a lot 214 . you can easily convince the customer. and I think we’re successful as a result. and they look for a specific set of solutions. If you start there and say. If you know where you can provide that value-add and know where you can play because you have the internal resources to do that. and they want you to immediately articulate that in a way that brings a solution to the table. We focus a lot of our energy into really strengthening relationships. and you have that internal mindset in place. then you set up your business strategies that way.

which we all know gets at the structural foundations of an organization. That gives us the opportunity to work with a variety of customers. The strength and depth of our one-on-one relationships with our customers are really keyed around success.Leading Consultants of what we do and say is sensitive – we deal with company culture issues. When we’ve 215 . challenges. our customers are traumatized by the types of initiatives they need to implement when we engage with them to get them through restructuring exercises or laying off workers. We have people who have worked on those programs and know exactly what that market is and how we can best provide that value-add to the customer in that market and how we can best secure career transitions for their employee base. many of whom have similar. because this will ultimately affect how they’re going to do the job. Providing Value-add Providing value-add is a process you need to follow through within your own strategic planning. though not exactly the same. It involves talking about where you provide that skill set. We need to know their agenda and find out its impact on them as individuals. Often. What we do is pull from our knowledge base. Let me give you an example: We represent several companies in the high-tech business that are going through considerable restructurings at this time.

And if we can sell it to ourselves.” We go in and say. we know we can be the best at convincing our customers. This involves learning as much as they can about the company through public sources. Getting up to speed requires a front-end approach. where we sit down and identify needs and outcomes with the individuals who asked us to come 216 . the execution of the knowledge to the customer is easy. “We understand the problems surrounding the placement of employees within this industry and the potential path result because of these issues. as well as gathering information in the preinterview process. We’re able to answer many of the questions our customers have before we walk into that first meeting. We spend a lot of time in the planning process fostering that understanding of our skills internally. “We’re the leading consultants on career transition issues. we’re not going in saying. When we approach a high-tech company. Here are the solutions that we’ve thought through as to why it makes sense to engage in this way. Our consultants must do a considerable amount of work before they walk into any request for proposal (RFP) or any presentation made in front of a customer. selling it to ourselves.Inside The Minds accumulated our knowledge and identified our strengths.” I think only when you do this do you secure revenue growth and customer acceptance.

I have found a direct correlation between the number of people in front of the customer and the profitability of the firm. You do not put your resources into internal office space or 217 . We have processes that help facilitate that information gathering: Consultants can use our databases of information to immediately track down historical data or information about career transition trends in the industry. If we did that. so your people can be most effective in the execution of their sales endeavors. We would not let any of our team go into any presentation without having completed the front-end process. Our management requires this front-end investigatory process by our consultants. Even before we walk in that door. Pitfalls and Golden Rules In my experience in consulting. and marketing and sales activities and external research in the form of continued development. It is important to have those systems in place in your organization. though.Leading Consultants in. What that essentially means is you want to put all of your company’s efforts and resources toward the customer in the form of face-to-face contact. we wouldn’t be successful. we want to have a good sense of the company’s issues and what the company expects of that meeting.

Think and act globally.” where an “entitlement” culture is allowed to exist. The best business advice I can give is the more people on the line in front of the customer. You have to understand ultimately that your business is driven by the value-add contribution you give to the customer. 3. Maximize employee talent. you will be successful. At DBM we have “six imperatives” that we filter through every business decision we make: 1. 4. If you keep your focus on that. all other activities around that should be geared toward that customer. 5. the better. See through the eyes of the customer or client. 2. That’s how we’ve built our company. I think those who are not successful in the consulting arena view their company as a “big organization. Share a common vision worldwide. If you keep your back office to a minimum. and limit your internal process meetings. If any decision cannot easily be seen through the eyes of the customer as a value-add. Have a sense of urgency and purpose. Leverage technology. then we don’t do it. always provide an external focus to your meetings. 6. This 218 .Inside The Minds elaborate internal systems. you’ll be successful. I think that is a major pitfall in consulting.

but by the same token. we don’t want to have a sense of value internally that is not generated by the external marketplace. but they have a specific skill set they focus on and move forward with. We meet regularly and constantly challenge ourselves to “re-test” our thinking. “I can be your consultant. but if you are doing something or buying something just to keep someone’s title or exclusively for the profitability of the company. I think any organization that wants to be successful really needs to do that. By forming a planning platform. to pinpoint the value-add situations they can really play in. A smaller company would be wise to limit themselves. Never surprise a company with the amount of 219 . you will not be successful.Leading Consultants doesn’t mean we don’t have equipment that allows people to do their jobs. I think a lot of effort is expended on creating solutions that aren’t core to what companies do.” Never play in an area where you don’t have the value-add contribution thought through in advance. Also. They may play in other arenas. we do stay focused as an organization on our core competencies. People have to have the tools to do their jobs. Never overcommit to a customer your ability to deliver the product you suggest. as opposed to saying. I’m going to mention again the hazard of focusing on what you can’t do. It’s extraordinarily rare to see a consulting organization that is able to play in the full spectrum of potential consulting advice and counsel.

220 . as opposed to under-deliver. particularly when world economies are in recession. it is about supplying support and counsel around HR solutions to the market.Inside The Minds a bill or how you’re executing the program. We can understand that. Conversely. and stay in touch. or organizations aren’t taking people out. maintain and develop that relationship because you never know when that will come back. As such. Managing In Turbulent Times I’m in a different business from a traditional consulting perspective in that our business is helping people through career change. but then we have to ask how can we help in those situations? Where will our skill set apply when it is not in demand in a given economic climate? Our strength is not just in career transitions. Whether or not you’ve completed the assignment. at times of economic change. as organizations are realizing the need to right-size or align their workforces with their declining revenue streams. In fact. we have turbulent times when the economy is so strong that there is not as much support around career transition. we could almost be called a counter-cyclical service in that there is more need for our assistance when the economy is not doing well. our activities are extremely brisk. Over-deliver.

That means helping organizations with change. you need to be balanced in product or service and customers. DBM is a $300 million company today. and we know where we are strong in that arena: For us it’s in retention and executive coaching. We already have the skill set and the solution set we need to provide. because then you can provide quick solutions when you have an area of crisis. executive coaching or retention issues. We’re fast. 221 . no matter what the size. as an organization. we balance that with the customer need. and it operates as a $20 million company. areas where we can provide value-add. which are areas in which we have the competencies to play. I think. It is important to look at yourself as a small company. and we’ll make changes as needed by the marketplace. and when the economy is good. then think about their core competencies and what the consumer is looking for. We’ve looked at our organizational resources.Leading Consultants To enhance this. we’ve used many of the programs we’ve implemented for career-transitioned employees to help organizations when they’re going through change that might not actually involve career transitions – for example. In turbulent times we do quite well. Companies need to be fast and fluid with that. Organizations that struggle need to refocus their business quickly. No consulting company will be successful long-term unless it has that ability to change. then gear their service where they already have strength in that competency.

you’ll have a rather limited role within the consulting organization. You need a well-rounded individual who has the desire and the ability to communicate. whether it’s on a personal level. and the ability to do that in a way that is driven by the best interest of the customer. and to react. and an intense desire to help people look forward. I’m looking for people who have a strong overall skill set around written or oral communication. you need to have a broad experience base and strong interpersonal skills. I’m looking for people who want to do something different and provide change. or an external practice development level. It is your job “satisfier.Inside The Minds The People For an individual to be successful. then the consulting business is not for you. whether oral or written. 222 . that’s how I was brought up. I am not interested in sitting in on internal meetings. or whether it’s a tradeshow or new business. I’d rather be out in front of the customer. You need to have communication skills. to listen. I enjoy that. But you have to want to interrelate.” If you don’t want that interaction. As a leader whose experiences are developed through the personal services sector industry. Those people are motivated and therefore successful. and enjoy it. a customer relationship level. If you stay in the business without this ability to interrelate. trying to move my career forward that way.

and work with the management of the company. They are responsive to their needs in a way that makes the customer feel as though they’re “part of the company” instead of in a “vendor” relationship. and know that it is their responsibility to get in there with the company in helping to execute those solutions. They have to execute that strategy and stay engaged. You need to 223 . and as a result. even after the experience. One of our criteria is to have a desire and personal responsibility to grow professionally. At DBM we think of ourselves as a leading-edge learning organization.Leading Consultants Our best consultants have the intense desire to execute with the customer. The best consultants are those who understand they can work through the company. They care about that company. care about their responsibility in the process. Those who are good consultants probably have the right answer. but these were not worked through with the customer in a way that the company understood and could execute on it. but they don’t understand the culture or the nuance of the person paying for the service. they don’t provide the type of support necessary to get the program through. where the presenter used a book solution or a solution set thought through by a very well educated individual. and have come up with good strategic thought around their solution. I’ve seen some excellent presentations and some excellent executions that haven’t been customer focused.

The best people who do that do it on their own time. Personally. To be successful in the business. where I can get away and sit and think and read. your job is to execute today and learn about today’s challenges. as well as on company time. I accomplish this balance by rigorously maintaining two non-work facets of my life: I take time to get away from the business occasionally. They need to do that to be successful. so we provide funds to that end and train along those lines. Taking a day off here or there.Inside The Minds devote a period of time to becoming state-of-the-art to forward your career. you need to have that same mindset. whether it’s a specific industry or a specific weakness they want to address. or every Friday in the summer will not be enough to get you to “see the forest through the trees. I like to take one week off every three months. Your job is not just to execute well today. and I work hard at balancing my business and family time. and we want and need to drive them toward their own development and desires and a continued learning situation.” That’s how I handle my long-term 224 . I would urge all employees to do something like that. so you can address tomorrow’s solutions. I put this week in my book and make sure my secretary doesn’t fill that time slot. At DBM we know we’re dealing with highly talented people in this organization. I need time outside of the day-to-day rush to think of where the business is going and where it can best be supported going forward. They do that in a way they find constructive.

balance of life is important. until 6 p. when it’s over..Leading Consultants needs. For me. But when I am gone. and from 4 p.m. some people turn off the computer and leave.. More and more 225 . and I get home late at night. and sit and watch him play.. But for me. I’m gone. I work on my e-mails at night. I will leave at three in the afternoon on days my son plays baseball for his high school varsity team. watching my son – that gives me the balance. when his game starts. I will go there. I’m just sitting there. Sometimes I’m in my office by 6:30 a.m. my children are extraordinarily important to me in achieving balance in my life. When I’m there. and to give myself that extra time. People can do that differently in different organizations. It doesn’t bother me to be at work early or to be working on e-mail at 10:00 at night. Some leave the weekends for themselves. The Future of Consulting You’re going to see a continued explosion in the consulting business in the next five to ten years. Some people get up early. Also. the result is. I just go in very early in the morning. I have the phone off. watching the game. I’m there. take out my lawn chair.m. That’s it for their night. that time with my son is important and I will take that time. I would advise every person in an organization to find that balance. The methodology is not important.

Organizations will be willing to pay a premium for it. As organizations adapt. Take. the talents and skill sets that are necessary for today’s solutions. both today and in the future. for example. and merge. or they can look externally. Do I think the business is a good one? You bet. There is also no question that the demographics of people who are leaving the workforce will leave spaces that the organizations will have to fill. and the trend is that they will look externally. recombine. this will be the business to be in. as opposed to keeping a workforce on a fixed basis to get it day-in and day-out. People are less inclined to be tied to one organization and more inclined to be 226 . They’re going to be looking for a specific expertise to drive their organizations forward. and they’re not inclined to have that sitting in their organization. They are more complicated today and very often cross-functional. Organizations can fill those spaces internally. Do I think it’s growing? Absolutely! I see all the corporate dynamics being in favor of consulting organizations growing and growing.Inside The Minds companies are going to outsource what they can. You will continue to see an explosion in this industry as organizations are more inclined to get that specific data that they need when they need it. No one alone can create the solutions – only the appropriate environment for the team to reach an appropriate solution.

S. Silveri is chief executive officer and president of Drake Beam Morin (DBM). Previously. Mr. He also previously held the position of senior vice president. advertising. Mr. a position he assumed in April 2000. finance and administration. where he was responsible for DBM’s accounting department. Silveri was executive vice president. Before joining DBM in 1993. Silveri was chief operating officer of DBM’s U. Silveri obtained 13 years of experience in specialized fields of the media business – public relations. information systems. Thomas J. and facilities management functions. Mr. The consulting business is going to continue to expand in the upcoming years. Before assuming this role. will play a role in leading consulting organizations going forward.Leading Consultants responsible for their own careers. or telecommuting. and research. and they can do that much more easily in a consulting environment than in one organization. the financial planning and analysis group. The increasing trend of working out of your home. operations. He is responsible for handling the day-to-day management of the company’s global operations. finance and 227 . and I’m glad to be a part of this exciting and vibrant industry.

at Hill and Knowlton. 228 . and prior to that. he was controller of JWT Group.Inside The Minds administration.

Leading Consultants THE FUTURE OF MARKETING CONSULTING DAVID FRIGSTAD Frost & Sullivan Chairman 229 .

This integration. A vast number of emerging and disruptive technologies in a rapidly globalizing economy will significantly increase the demand for multi-talented consulting teams. will support companies in their efforts to outsource strategic information-gathering and strategy formulation to their primary consultants. we see an accelerating integration of the Internet with competitive intelligence. The demand for specialized market and technical consultants. working in close cooperation and in strict confidentiality with the clients. market intelligence. which possess many specific skills to make projects successful. combined with an increasing demand for ethics in market and competitive data collection. including the global enterprise and the external partners. On the information side. which include the consultants.Inside The Minds The Direction of Marketing Consulting The future of the marketing consulting industry looks very positive as many trends and technologies come together to enhance the relationship between the consultant and the client. The relationship between consultant and client will become much more seamless in the future as information is shared among all players in given projects. and KMS. will be much more 230 . The traditional internal teams will not have the skill sets to perform successful global projects in a time frame to meet financial success. CRM.

One day you’re in Germany. and then you’re in Japan. If I had a project in Japan. That just wasn’t happening ten years ago. and when I had a project in Germany. Now 75 percent of our clients come to us. I started in 1980. This 231 . Everyday everyone looks at business with a different perspective. it was about the Japanese market. but that cross-cultural interaction is a lot of fun and very rewarding. It was always very regionally focused. the next day you’re in China. Changes in the Business Environment The biggest single shift in the business environment is toward globalization. Exciting Things About Consulting What is a tremendous amount of fun is working with different executives with completely different cultural backgrounds. and they want every region of the world covered. it’s really a great pleasure to learn about other cultures and meet other people. It’s hard to say why it’s so exciting. and when you go into those kinds of challenges. it was about the German market. There appear to be very few consulting companies ready for this transition.Leading Consultants common in coming years.

The large companies will grow more slowly. You really need that multi-cultural focus in the business because clients are asking what’s going on in all these different countries. and today less than half of our staff was born in the United States. there were a lot of papers on which large consulting companies could draw. It’s going to be very interesting because the Internet is causing a very pure flow of information that we have never had before. the specialties they have. Now a client looking for a specific technology in a specific issue can go to the Internet and be exposed to hundreds of companies that are very focused on their need. Suddenly. which you simply couldn’t do on paper. I think one result of this is that fragmentation in the business might happen and have a huge impact. and there will be many more boutique 232 . probably 95 percent of our staff were American or British. and even the make-up of who they are. we have to completely reconfigure our global team of analysts. The second biggest change is the Internet. the Internet puts large consulting companies at great risk. Years ago. They will not be forced to go to the large brandname consulting companies to get their intelligence. The Internet has given clients an incredible leap in value-add because of the integration of knowledge management techniques and principles.Inside The Minds trend toward globalization means that as a consulting company. When the world was based on paper.

None of this information is integrated. Then we started our customer survey centers to collect data. Now we’re looking very closely at econometric forecasts and data by industry. They get econometric data and economic forecasts from other suppliers. as well as the strategy. and they get customer demographic information from other companies beyond that. and so our clients can use it rapidly. They get their regulatory news and government news from a newsletter. Another big trend is toward a more integrated approach for client applications. even though it correlates very well. The great pressure going forward will be to integrate all of this information into something that holds together and can be leveraged to help a client create a strategy. so it’s not conflicting. At least there’s a big risk of that happening. I see that a lot of our clients are very frustrated because they get customer information and market share information from the companies that are polling the customer base. I think there will be a trend toward clients wanting consultants that integrate a broader spectrum of the information. Then they’re getting their market information and analysis and strategy from Frost and Sullivan. 233 . we just focused on competitive data. When Frost and Sullivan was founded. We’re adding demographic tables and are integrating all of this information so it makes sense. Customers don’t have time to make sense of all this different data.Leading Consultants firms going forward.

integrate information for them better. Measuring success can be a difficult thing to do. We see success in terms of killing a bad idea or making a new product launch more effective. When consultants more and more become partners with our larger clients.Inside The Minds What Success Means Good marketing consulting is very much focused on the marketing aspect of a client’s portfolio. we go through all the projects we’ve done. But we go back and look at the ROI on the project. The point here is that stopping bad ideas is a success. including the future expenses on the project. their CEOs. When I sit down with my long-term clients. just as we can for promoting something that does make sense. at the end of the day. when you’re working very closely with their marketing associates. and provide new insights and strategies. 234 . and their business development executives in a partnership. it becomes a little harder to measure success. it’s a smile on the face of the CEO and the stakeholder that tells you you’re on the right track. and we can see the positive return of stopping what doesn’t make sense. even though they have to write down quite a bit of R&D investment. however. Even though you know you can speed up their decisions. and a lot of what we do is work on new product development and product launches and things of that nature. Clients sometimes have a hard time relating to stopping an R&D project and seeing it as great success.

but I think all the consulting companies are following that track. It’s harder to measure success because you’re trying to keep 12 people integrated. You need to have a consulting methodology for each of the applications. Now we’re suddenly dealing with a global team of project development managers. What we’re doing today is at least twice as good as what we were doing five years ago. and satisfied with what you’re doing instead of just one. In the past we would deal with one person in one company. You really have to first understand the objectives of that executive’s title and then the applications that go along with those objectives. which is studying the job functions within a client and understanding them enough to make a particular executive more powerful in their impact on the company. and it has put a lot of pressure on other companies to be constantly improving. The client teams have gotten larger. Opportunities for Consulting A lot of opportunity sits in application consulting. It has definitely gotten harder to measure success. and for helping with the implementation have all increased significantly. to know that what you’re doing is right. as well.Leading Consultants Measuring marketing consulting success has become a lot harder over time because the clients’ expectations for the integration of data. What I often see is the same research design 235 . happy. for knowledge management.

you have to find out the most pertinent data to address that challenge. A more specific methodology of analyzing those things just for the application of acquisitions will increase the company’s success rate of doing that. Most companies do a very poor job of conducting due diligence on acquisitions. but it’s really great once you get on top of it. I think that’s probably a very difficult thing to do (as we’re learning ourselves). One way to realize the opportunity is to really fine-tune the consulting process for a specific application. but the real opportunity is to develop expertise in each one of the applications. you’ll know where you should go after it. But applications are different. regardless of the challenge. One example is in acquisitions. you either identify a challenge for a client. Successful Methodologies If you know what the application is.Inside The Minds and methodology applied to any application. or what their key application is going to be. This is where I 236 . and you don’t get as accurate results or as good strategies emanating from a one-size-fitsall approach. At the beginning. They do a very poor job of understanding an acquisition’s position within the customer group and within the landscape. Once that’s identified. I see most consulting firms using the same methodology.

One of the methods we really specialize in is getting the right information from the client base. There are a lot more options and permutations to look at when you’re trying to solve this problem. and most importantly what questions to ask and in what forum to ask them.Leading Consultants think a lot of consultants fall apart. If there are five or six different ways to segment a client population. These are often done on Internet surveys or by telephone surveys. Depending on the application. In addition. Say you’re launching a new technology. you might need to go out and do face-to-face surveys. One methodology we have found useful for quite a few of our clients is using a measurement like brand recognition. if you’re working in customer groups. there are five or six different research instruments to get information from the population. We also look for the competitor products and disruptive technologies to really round out the whole spectrum of strategic options. It depends on how you segment the client population as part of the methodology. and then there’s the regulatory landscape to add to the mix. or you might need to look at focus groups. but you could end up using five or six methodologies. At some level. it’s very important to get the proper data from the entire client population. 237 . but not only on the product we’re looking at. there is the competitive landscape. or at least a statistically significant sample size. depending on the application.

It creates value-added discussions and strategies to get them back on track. is that your arrogance grows and grows to a point where you can become completely blind to what’s going on in the marketplace. We go out for our clients and interview the competitor’s clients and their customers. and they’re actually at point C. if you have a successful product. But if you look at a brand value – that is. their customers cannot remember their company’s name or the product. you can keep pace with what is going on. and we’ll ask questions about brand recognition and brand recall. going out and looking at a diverse section of the consumer database – you can come back with a reality check of where the brand really is. Keeping Pace with the Markets I think we have a tremendous advantage because we employ over 700 analysts who track nine different industrial sectors full-time. This can really shock a client because the tendency within a company. talking to the customers. We find that with some of our largest clients.Inside The Minds Today there’s an increased emphasis on brand recognition and equity and brand value. That helps you keep 238 . If you’re constantly talking to the vendors. That has provided tremendous value for a lot of clients because they suddenly realize that they thought they were at point A. and talking to regulators in probably 20 countries around the world.

and I don’t really put that in the realm of what we do. There has certainly been a huge boom in the IT consulting and implementation end of the business in recent years. we already have information that we know will be keeping them up at 4:00 in the morning thinking about it.Leading Consultants focused on the strategic challenges that we’ll be facing – such as the consolidation of the pharmaceutical industry. which is what we do. “What kind of consulting needs do you have today?” You have to go in and say. The Differences Among Consulting Companies There are different types of consulting. By studying those analyses when we go to see a CEO or a VP of business development. or this opportunity. Then you have the management consultants. and the current global economic recession. That boom has made companies like Accenture very successful. You can’t go into a client and ask. this challenge.” That usually gets a very positive response because it’s a multi-million dollar or billion-dollar impact on that company. “We’d like to talk to you about how your company is addressing this problem. We look at our place as a 239 . like Booz·Allen and McKenzie. And then there’s marketing consulting. generic pharmaceuticals.

Someone has to pay for this. finance. etc. 240 . and here I believe most companies want a fixed-price contract. emerging technologies. as do we. mergers and acquisitions. market strategies. and so on. Then as you go into it. and that would be categories such as new product launch. either you or your client. When you go to hourly charges. the next reasonable segmentation would be by industry. A great way to lose a client is to send them a bill they didn’t expect. suppose you’re working on an IT implementation project. at McKenzie I believe they have different industry segments for all their groups. techs. The first and easiest way to segment the consulting industry is by the functional expertise and by separating out marketing. product development. and things of that nature. rather than an hourly contract. For example. IT.Inside The Minds consultant as it pertains to new product development. Compensation in Consulting Your compensation as a consultant depends on the type of application you’re working on. Then the third dimension to this matrix or segmentation strategy would be by the application. you’re putting a pretty big hole in your boat because things can go way over budget. For example.

That’s when a company really stands behind its work and behind its people. on the financial side. and you also have to include the sales and marketing expenses. In our sector. which allows us to use all of the money we get from the client on their needs. It’s actually very unproductive on one level for us if we are continually involved in the bidding process on a project-by-project basis. I think the least effective is the project-by-project model because on the consulting side you have to put the price up to cover the fact that you might not get that agreement. and so the payment is a much more risk-based payment.Leading Consultants There are other types of projects where. or what I call a strategic alliance or partnership. 241 . There are so many different models of pricing. The Best Characteristics of Consultants Integrity is the most important trait a consulting firm can have. the clients have a strong preference to pay by what’s saved in various processes or systems. For a client. We know exactly how much capital we’re going to get each month and each year from a client. on the consulting side. we prefer to work with our clients on an annual subscription base. that’s not value added or part of the equation.

virtually all of the client revenue goes back to the staff. they succeed. is not that motivating in an economic downturn. which. which can generate repeat business. They don’t have long contracts that sign off with penalties and all that. and that the client pays their salaries. They do most of their work on a handshake or a one-page letter agreement. But the ones that run their businesses like that – I am in awe of them. If I can make them know that as we succeed. We look very closely at trying to develop a system to match the salary expenses and bonuses we pay to our employees. and there aren’t many of them. In a slow-down like this. managing through this economic slowdown. we alter our salary packages to decrease base pay and increase the incentive pay for success. because at the end of the day. of course. then the focus is on making clients happy. because several of my client groups are in what I would call a deep recession and have been for a couple of years. not the company.Inside The Minds You can identify the clients of consulting companies with integrity because they don’t end up in legal squabbles with their consulting partners. Managing During Turbulent Times In my own company it has certainly been a very touchy year. Everyone understands that this is an 242 . Those are the ones I respect most.

There are some companies that do well during a recession. they can tell our clients. but for very specific market sectors – medical ultrasounds or specific types of memory chips. and you can do well if you’re proactive during a recession. every company was going out there very aggressively on acquisition programs. If I can get my consultants to see these changes in advance. But 243 . We want to find the economic forecasts. not for a country’s GNP. they’re going to save hundreds of millions of dollars. Managing growth is really important. If they continue to produce higher. If we can make our clients proactive to market changes. When the economy was booming. and they’re going to lose money for another two to three months while they restructure.Leading Consultants economic slow-down. so we’re working very closely on how to find customer pockets. and the market turns down. who can start to proactively recalibrate their business according to where the market’s going and save hundreds of millions of dollars. they’ve already lost money for two or three months. and their sales drop off. In turbulent times like these. the customer’s viewpoint goes from five years out to the next quarter. You also have to manage your consulting approach. and I think the whole consulting industry is experiencing a certain amount of it right now. for example – so our customers can proactively calibrate their business to what the short-term prospects are going to look like.

this is the time companies should be aggressively acquiring new companies. Now that the economy has slowed down. Our firm is unique in that our company is owned by a handful of partners. We are far more motivated by seeing if our ideas work and how our value-added programs for clients work. is that most companies run together like lemmings. I think we take a tremendous amount of risk that I think other 244 . and people are not using good strategies right now. and I don’t think any of our partners is motivated by money. at any given point in time. On the merger and acquisitions front. there are great opportunities to increase market share and get rid of key competitors. we like to have 75 percent of our investments in highly risky places in terms of product development and services for our clients and expansion. though. Balancing Risk At Frost and Sullivan. We do this because my partners and I all derive fun in life and the challenge in business by taking risks and seeing how our ideas work. What happens instead. You can get some incredibly good bargains right now on the prices of some companies.Inside The Minds acquisitions are very expensive in boom times. Everyone is pulling in their horns instead of taking advantage of the situation. So we’re always investing that way.

it caused me to be much. Best Advice The best piece of advice I’ve received was from my high school gymnastics coach. Every dime we make is reinvested for risky future ideas. We make some big mistakes.” Probably for the first ten to 15 years of my career. I spent way too much time on either bad projects or people who weren’t very well-suited for the consulting industry. much more aggressive about developing a consulting team that has a similar passion for what we want to do. When I see people who don’t fit the team. we have very exciting times ahead because we have some very exciting ideas in the pipeline. “When a businessman is on 245 . I apologize if that sounds a little cold. When I thought about what my coach’s message was. you can’t make steak out of hamburger. so I would say we’re probably out of balance on the risky side. “Dave. what we’re all committed to. and I tried to turn them into first-class consultants.Leading Consultants more prudent consulting companies wouldn’t take. He looked at me and said. and what we’re trying to accomplish. but I think people who really have a passion for what we’re doing make all of our jobs easier. I don’t spend time trying to indoctrinate them. but as the future unrolls. My best piece of advice regarding balancing life and work was from the person who said.

what happens over time is that your weaknesses are highlighted more and more as you move forward. clients every day. Remember. so being a leader in a consulting company is tremendously strenuous and hugely challenging. It’s almost as if you don’t gain confidence as a leader. working on a project. including me. Right now I’ve been in a hotel for the last 70 days. but you learn what great leadership is. as it does for me.Inside The Minds his deathbed. he never says he wishes he had spent more time at work. and industries every day. I think that gets out of balance for most consultants. God didn’t put us on this earth to run a consulting business. 246 .” Despite that saying. The best advice is to keep life’s bigger picture in front of us all the time. My wife and family aren’t exactly thrilled about it. Leadership Running a consulting company puts profound pressure on developing your leadership skills. I think most consultants have a very unhealthy lifestyle. You have a staff of very bright individuals with lots of ideas. In the consulting industry you change projects every day. As I’ve sat in the leadership post at Frost and Sullivan. and see our role in it. They are difficult people to manage because they are so bright.

You cannot let communication slow down at any point. and you don’t really have a lot of time to rethink the company’s direction every time there’s a problem. 247 . The best way to stay on the edge is to live in the client’s company or to take some time out to spend time with other consultants. The demands they put on you to keep on top of the game are enormous. There are so many varied viewpoints and disagreements and arguments about where to take the company. what the major objectives are. To keep an edge in this industry.Leading Consultants One of those skills is the commitment to and conviction in the direction you’re taking your company in. The ideas that another CEO can give you in 15 minutes can be worth more than what you’d get in a month or two from your own company. and what the status of these objectives is. it is important for the leader to go out and see other CEOs in the client base and other consulting companies. Another thing I learned is that you cannot communicate enough. And you have to give large doses of positive feedback on all of the accomplishments going on in the company. People have to know where the company is going.

They’re facing multicultural issues and application issues from all over the world. and meet every challenge. address every problem. The second thing that greatly increases the client’s satisfaction.Inside The Minds Staffing a Good Team I think passion is the underlying component that everyone on a good team has to have. I think some of the big consulting companies are starting to see that that doesn’t always make it with the client base. It goes to that segmentation that I mentioned earlier. all with different experience and backgrounds. you have to have a good team working on it. and South America. and even goes well beyond satisfaction. They were the same race and the same background. I think in the past some of the consulting companies were too homogeneous. It’s good to have a little friction. 248 . or by two people who get along too well. in many cases. a cross-cultural team from Asia. You have several people who have in-depth knowledge of different applications and. North America. Companies we work with are now getting revenues from all over the world. Europe. To increase the probability that you’ll find every problem. is developing a cross-functional team with multiple disciplines. The projects that are least likely to succeed are managed by one or two people with a similar background.

California. In 1980 he began supporting European manufacturers of electronic equipment entering the U. It sounds so obvious. so does blindness. I have seen that the attitude that “we know everything. we’re on top of everything” in so many consulting companies. You have to be able to look at your consulting company through the customer’s eyes and not look at the client through your own eyes.S. It’s hard to develop this insight because with most consulting companies. but with us. that has to be the one biggest golden rule. to get inside the client’s mind. analyzing the trends of high-technology Asian and European direct investment in the United States for the Department of Commerce. market. The company specialized in high-technology 249 . That just doesn’t work anymore in the consulting industry. David Frigstad began his career in marketing consulting in 1977.Leading Consultants The Golden Rules of Consulting It sounds very trite but it’s very important to be customerfocused. Intimidating the clients with your educational background or knowledge of the industry is just not accepted anymore. as success grows. By 1981 he co-founded Market Intelligence Research Company in Mountain View. and as arrogance grows. even my own. and all our competitors. so does arrogance. That’s rule number two: Resist arrogance.

High Technology Market Research. and employs 600 professionals worldwide. research. Frigstad designed the Market Engineering Consulting process from extensive worldwide consulting and business experience. Mr. Customer Engineering. and strategy. offers a full line of consulting services. Market Engineering. Frigstad has authored several books. He is currently working on a new book entitled Strategy Engineering: A Measurement Based Strategy Development System. 250 . Over his career. The combined company.Inside The Minds marketing consulting. including Venture Capital Proposal Package. This process creates the foundation and methodology on which Frost & Sullivan performs its consulting and research work. from competitive benchmarking to corporate training. Mr. and Market Research and Forecasting in Industrial Markets. Market Engineering is a measurement-based marketing system designed to drive marketing efficiency and improvement in market position. In 1993 Market Intelligence acquired Frost & Sullivan. Cost Effective Market Research. now called Frost & Sullivan. Frigstad lectures and trains throughout the world on the Frost & Sullivan Market Engineering System. Competitive Engineering. Market Research and Forecasting in the Healthcare Industry. Mr.

customer engineering.Leading Consultants Mr. Frigstad holds a Bachelor of Science degree in MIS and management. He received his master’s degree in Japanese business administration from the Japan American Institute of Management Science in association with Sophia University. market engineering. 251 . Tokyo. He is a popular speaker at many industry conferences including Competitive Benchmarking in the Telecommunications Industry. He also holds a master’s degree in business administration with a double concentration in international finance and international marketing from Indiana University. and the Automotive Aftermarket Annual Conference. the Medical Device Industry Annual Conference. Mr. Japan. Frigstad has lectured and trained extensively around the world on competitive benchmarking. and business strategy.

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Leading Consultants THE RULES HAVE CHANGED JOHN C. MCAULIFFE General Physics Corporation President 253 .

much of what we do is related to helping our clients manage the constant change that has become a part of everyday business life. It’s a dynamic business. It also provides the opportunity to outsource large components of the training function. Once these systems are implemented. providing the customer with a high level of expertise and significant growth for GP. Biggest Changes Advances in technology have been the biggest drivers in consulting. Everybody’s trying to do things better and 254 . There’s a real sense of satisfaction that comes when we provide a solution for a client that can save them money and make them more efficient and more productive. In fact. There’s constant motion – always new ideas and unique issues. The advent of learning management systems has created a great deal of excitement in the learning and education arena. the development of critical business processes and the ability to deliver critical training using technology grow significantly. and good consultants are people who embrace new challenges. clients present new challenges every day.Inside The Minds The Excitement of Consulting The most exciting aspect of consulting is the constant change.

Technology aside. rather than on a strictly fixed fee. This has forced us to be more creative and to show a measurable return on the investment for the services we provide. In our history we worked predominantly in regulated industries. quality consulting will always come down to real human beings working closely together. it’s really just the tools and the pace that change. There are a lot of situations these days where metrics are developed to evaluate our performance. that’s going to continue as the pace of technological improvement continues to increase. but these days we really place great emphasis on keeping our people ahead of the technology curve. We see a lot of situations now where we may be compensated on an award fee. but today the requirements aren’t there. 255 .Leading Consultants faster. so law dictated a lot of the work we did. We’ve had to transform into an organization that provides solutions for companies that need to reduce costs and improve the use of their technology. and most of our consultants have extensive backgrounds in engineering or specific technical areas. using their experience to create innovative solutions that benefit the customer. That’s good for consultants and their customers alike. We’ve always hired the best and brightest specialists available.

They rely on us for advice. proven piece. so experience in the industry and a thorough understanding of the customer’s concerns are critical to building a trusting relationship. visualizing the big picture and the details all at once. going forward. and then transferring it to the customer via training and technology. quickly delivering innovative solutions.Inside The Minds The Art of Consulting An artist sees the world in a unique way. and then implementing them. and so do good consultants. building a better system in the mind. Delivering only a set of recommendations is akin to a painter producing only sketches. we’d rather deliver a complete. and you must be able to communicate effectively with the customer and speak their language.” There are specific industry needs out there. Good consultants look at a client situation through the eyes of an expert. rapidly identify issues that are preventing them from reaching their goals. Consulting firms that are capable of implementing their own recommendations are going to be successful companies. True success comes when we conduct the assessment and up-front analysis. It’s more than just being a “people person. Creativity is a big part of it. Consultants must also be proficient in the art of relationship building. 256 . and then prove our solution by performing the actual implementation.

That’s why we try to stay very close to the client. It also reminds them that we value our relationship with them. The Ideal Client Relationship We know we’ve become a partner with a client when they’ve made us part of their strategic plan. and we also subscribe to research analysts. based on what happens in the economy and with our customers. to look outside your own world every now and then. Regular interfaces with the client help us understand where they’re going.Leading Consultants Understanding Where the Industry is Going It’s important to keep track of the industry. Obviously. and what issues they’re grappling with. It’s 257 . even if we’re not currently on assignment with them. Internally. and they respect our judgment. where they want to go. our business can change at any second. The fact is that nobody has a crystal ball. That means we’ve earned their trust. Our staff performs the necessary research to keep us aware of trends occurring both inside and outside our current market sectors. we conduct periodic strategic planning meetings to make sure we’re heading down the right path and to share knowledge related to the industry and future business prospects. being part of trade organizations helps to a certain degree.

whether we’re assessing a training program. and the assessment must not be blind to new situations. costing the customer more money. depending on the situation. Each organization is different. the technology that might be available to deliver that training. It’s always better to start the relationship with a clean slate and do things right the first time. We use a combination of proven processes. or the ability within an organization to design and develop training. Methodologies of Assessment We follow many of our own branded processes. Generally speaking.Inside The Minds always best when we’re brought in up front. 258 . It’s key to have an assessment process that is rigorous and structured. a learning management system. and things will have to change. we want to help them do the analysis and the assessment. When a client is looking at a learning resource management system. we take a look at the size of the organization. the type of training that might be needed. and discover what processes need to change once the system is implemented. look at their current processes. but also flexible. Coming in late in the game is very difficult because in many cases there will be things that were previously overlooked. along with customized solutions.

and the objectives that the organization wants to reach. Experience weighs in heavily here. We may recommend outsourcing the training. but we also count on a fair amount of indoctrination and knowledge transfer from the client and/or the vendor who will be providing the software or technology. and we’ve developed a considerable arsenal of best practices based on that experience. or delivering it in-house. 259 . These people understand specific industries and have extensive experience with the software package or technology that drives their current assignment. we hire world-class subject matter experts.Leading Consultants the reporting and logistics requirements relating to it. We perform assessments that tell them the best way to run that training function. whether it should be a cost center or a profit center. We may have someone administer the program. while we provide a vendor management function. That gives us a leg up. and whether it should provide those services internally to the organization or look outside for resources. We also determine which business model should be used to best evaluate or measure that training function. or it may be that we take over the whole training function for the organization. Getting up to Speed At GP.

but it’s really not enough to just have subject matter expertise in the minds of our people. We place heavy emphasis on implementation. Because of the nature of the consulting that we do and the market sectors that we operate in. Differences in Firms There are large consulting firms. and then there are niche players – that’s where we fit in. Accenture. versus a Price Waterhouse Coopers. Our expertise is on certain market centers of the education arena and the technical area. We’re not finished until we’ve transferred that subject matter expertise to the minds of our clients. not just the pure consulting or assessment components.Inside The Minds Our people will rapidly get up to speed on the software or technology needed by the company they’re working with as part of their assignment. 260 . for example. Larger consulting firms are geared toward the assessment component of the consulting environment. which might be a much broader based consulting firm. our ability to bring market expertise is probably the key differentiating factor for us from a place like Accenture.

we can go with the ebbs and flows that come with a turbulent market. we have to stay focused on helping make their technology and people more efficient and more effective. some part-time. You don’t want to be a mile wide and an inch deep in a tough market place. It’s not easy to profit during a turbulent economy. allowing them to drive waste out of their organization. but one of the things that have helped us is our ability to provide outsourced services. it’s important to stay focused on clients and the core market sectors. We’ve tried to grab market share in those arenas.Leading Consultants Turbulent Markets During a turbulent market or a crisis. Companies are trying to make their workforce much more variable. and some consultants. When our clients are focused on slashing their costs. When dealing with our clients. We’ve had to make sure that our workforce is somewhat variable. Outsourcing is a way of doing that. we strive to reduce their costs and increase efficiency and quality. so that they can move their cost base with their revenue swings. versus trying to branch out significantly. 261 . By keeping some full-time employees. It’s best to be operating in a number of core market sectors with core clients for whom we’ve done a good job and with whom we are able to grow our presence.

We’ve tried to keep aware of the market sector. and our customers get a training initiative that is run like a business by experts in that field. Learning resource management systems are enterprise-wide software systems that help large organizations put their hands around the whole training function. and the service needs that they’re going to be looking for in the future. you have to be constantly providing new and different services. Learning resource management is a different way of saying outsourcing. and the development and delivery of the training to the organization. You have to take chances when choosing the customers you want to focus on and the market sectors and services you want to focus on. Companies that outsource non-core activities also have more access to expertise. This will allow us to allocate our dollars to the right places. It helps with the logistics. the scheduling. The customers are able to free themselves from the burden of fixed costs. the client base. 262 . As a consulting organization. and they receive a top-notch training initiative at the same time. Risk Risk is ingrained in the business. the record-keeping. there’s no way to avoid it.Inside The Minds We have really focused on consulting and the learning resource management area. Training is a core competency for us.

Leadership Intelligence is important for leaders.” or they get into a situation where they have to make a tough decision and just can’t bring themselves to make it. but we might not have done as much research or gained as much knowledge before making decisions as we do today. You have to get the right information and make prudent decisions. you could do those things. or advertising and marketing all of these things. we’ve tried to gather much more information when making decisions than we had in the past. When things are going well. You don’t want to take a risk with only a 50 percent chance of success. You have to be willing to make tough decisions. hiring new people. Leaders need the fortitude to make those decisions regularly. Leaders have to have confidence when taking risks. but in tough times. many possibilities. we didn’t just wing it. but there are no guarantees. Sometimes.Leading Consultants whether it is the development of new services. bad decisions are magnified. your 263 . Many leaders get into what’s called “information gridlock. There are many decisions. Over the last couple of years. even after gathering input from your associates and allowing people to have a voice in the process. In good times.

It’s tough to do. 264 . The leadership model that GP tries to follow is that of “servant leadership. A “Leadership Boot Camp” was designed. What occurred was a dramatic and lasting culture change. The climate survey (needs assessment) identified specific shortcomings in leadership behaviors. subjecting our own company to a very tough assessment. developed. a second climate survey was administered. but a well-reasoned explanation goes a long way toward getting people on-board. and communication are critical at this point. the results indicated dramatic positive change. and rolled out immediately to address leadership training and development and teamwork. You have to explain to them why you’re going to take the direction that you’re going to take. GP now has a values-based. We actually turned the focus on ourselves this time. conducted to determine the effectiveness of existing leadership and teamwork practices. openness. employee-driven environment in which every employee is welcomed as a business partner and a fellow steward. responsible and accountable for the company’s success.” Once the top three tiers of corporate leadership were trained. This model was prompted by a corporate climate survey.” by which leaders are expected to do everything they can to ensure the success of their organization. Honesty.Inside The Minds decision deviates from their recommendations. The battle-cry of the boot camp is. “Leadership and teamwork drive our performance.

if you don’t treat people right. but it’s something people have to understand. We try to make sure that the people we hire fully understand the job they’re going to have. our 265 . we’re looking for people with specific industry expertise and people with strong communications skills. If you do that. backing up an employee’s new idea. We need people who are willing to take on new and different challenges. so we’ve worked hard to make sure people understand what will be expected of them. That’s an unfortunate part of our existence. Overall. Building a Team We’ve instituted a behavioral interviewing process within GP. Great leaders earn the respect of their employees and provide an environment that fosters every individual’s growth. In the consulting business. people will be willing to come under your leadership and support you when you need it. We’re looking for people who are willing to travel. or giving people the freedom to do their job in the way that suits them best. you’re not in business – you’re really nothing without your employees.Leading Consultants Sometimes leadership means taking a risk on someone. Leaders must understand people and treat them right. New employees are trained to understand our dedication to customer service. Consistent with our corporate values.

we tell everybody that the best way to deal with conflict is to address it directly. We hope all those things combined have given people the tools necessary to handle difficult situations. internal and external.Inside The Minds core internal training course.” We also do a lot of training in the areas of negotiation. That’s not always easy. though. It’s critical to make sure individuals working on a team bring different strengths to the project. giving the customer access to personnel with diverse proficiencies and knowledge. First and foremost. It’s important to make sure issues aren’t hidden or pushed to the side and to make sure we engage in honest and open communication both with our customers and internally. We believe the best way in which to foster “teamwork” is to understand that everyone we deal with is a customer – “our number one customer. and others may be more relationship oriented. Many times we’ll be dealing with a lot of individuals who have different agendas or different ideas of what the assignment is really 266 . “Exceptional Customer Service” stresses the importance of carefully managing the relationship and managing every transaction with each of our customers. Some people may be more technically oriented. internal performance management. and conflict resolution. What we like to be able to do is to make sure the team covers those bases completely. others may be more business process oriented.

A few years ago. we went through an alignment process where we took all the leadership in the organization and refined our vision statement. It’s important to have people that mesh well with the client organization’s culture. We then established a set of corporate values based on the alignment process.Leading Consultants about. we participate in the leadership boot camps twice a year. as well. We have a three-year plan that we update annually. but also the year after. The boot camp format allows for input from everyone for inclusion into the continual strategic planning of the company. Most importantly. We aligned ourselves as a unified force in the direction we agreed on. 267 . It looks at not only next year. and then arranged the pieces of the organization to fit into that vision. Goals and Plans We have a unique process in our organization for goals and planning. This intensive training instills the leadership in our company with the corporate values and ensures that everyone is aware of the strategic goals of the company. and the year after that.

268 .Inside The Minds The Future of Consulting The use of technology is going to expand in our arena. their industry. This will teach us a lesson that in industry we have to have a more variable cost base. Implementing and maintaining these learning management systems is going to be a growth area for the industry as a whole. and 20. I think the whole idea of implementing solutions for noncore competencies is going to be important. After ten great years of virtual growth. These companies want to have a much more variable cost base to better manage the down times.000 people are laid off at United Airlines. You read in the paper every day that 20. their issues. subject matter expertise is key. The Golden Rules of Consulting Know your customer.000 at American Airlines. companies got out of the habit of being cost-conscious and having business models that allow for ups and downs. and the ability to deliver training over the Web will be key. Consultants must understand the details about the client’s business. and their technology. outsourcing is the key.

Working hard means working smart. There must be a measurable return on investment. you’ll be a better 269 . You may have the best answers in the world. Solutions that consultants bring to clients must have tangible results. In the long term. but also because they’re willing to work very hard. No matter who you are. whether it’s increased productivity. and there are times when it has to be time to go home. they deserve an excellent return on that investment. Our customers spend a lot of money on our services. new technology. Companies that stick to their values come out all right. but if you can’t articulate them. or getting more out of the current technology. Some days it’s okay to work less. your life needs to be balanced. You can’t feel guilty because you didn’t work a 14-hour day.Leading Consultants Consultants must be excellent communicators. It’s really easy in tough times to abandon the things that have made you successful. Stick to your values in good times and in bad times. There has to be a balance in your life. they’re worthless. reduced cost. You have to keep in mind that tough times are generally brief. People who get into roles of leadership get there because they’re generally pretty intelligent. In bad times you have to remember what made you successful as a company and as an individual.

McAuliffe has guided the strategy and operations that have made GP a world leader in performance improvement services.Inside The Minds person and a better employee. If your life isn’t balanced. As president of General Physics (GP). McAuliffe worked for Arthur Andersen after graduating from Loyola College in Baltimore. Internally. he is a member of the board of directors of GP’s corporate parent. Before being named president. Everyone in this industry has to do a lot of reading to keep up with things. Read. GP Strategies Corporation. you’re hearing their problems. Work hard to be in touch with customers on a consistent basis. training. and technical and engineering services to Fortune 1000 companies. so they know you’re there. it’s important to stay in touch with people and have constant discussions within the organization. GP provides consulting. Before joining General Physics. Mr. problems are going to creep into your work life and have a major impact. Maryland. In addition. John C. and you’re hearing their issues. 270 . Mr. McAuliffe served as the company’s chief operating officer and chief financial officer.

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